Romania and Estonia have been given the green light by the European Commission to hand out a total 13 million free EUAs to their utilities for their 2014 emissions, meaning companies in those countries should be able to use the units to meet the Apr. 30 EU ETS compliance deadline.
The Commission on Tuesday approved Romania to hand out 8.6 million units and Estonia to hand out 4.4 million, it said in an update on its website, meaning those permits could be doled out as soon as today.
Eight mainly eastern European countries can issue annually to their utilities a declining amount of free EUAs between 2013 and 2019 to help avoid electricity price spikes and to modernise their power sectors.
In order to complete these so-called ‘derogation’ allocations, member states must submit a National Allocation Table (NAT) to the European Commission, showing that they have made, or have plans to make, the necessary infrastructure investments.
Yesterday’s approval means Bulgaria, Lithuania and Poland are still to be OK’ed to hand out up to 84.4 million EUAs for last year’s emissions, with just two weeks remaining before all companies covered under the EU ETS are due to hand in their permits.
Failure to meet this deadline could force companies to spend millions of euros to buy any required permits at market, or trigger fines in excess of €100/tonne.
One market participant with an eastern European utility earlier this month said that while larger power generators had taken precautions over the past year to stock up on allowances, smaller and medium-sized ones were still at risk of being caught short because they rely on spot permits instead of forward contracts.
By Mike Szabo – firstname.lastname@example.org