80% of EU’s New Entrants Reserve still unclaimed, while unallocated EUAs rise

Published 18:38 on July 23, 2015  /  Last updated at 11:21 on October 14, 2015  /  EMEA, EU ETS  /  No Comments

Around 80% of the EU’s New Entrants Reserve (NER) remains unclaimed nearly a third of the way into the current ETS trading phase, after nations allocated 21.7 million free EUAs to new or expanding installations over the past six months, the European Commission said Thursday.

Around 80% of the EU’s New Entrants Reserve (NER) remains unclaimed nearly a third of the way into the current ETS trading phase, after nations allocated 21.7 million free EUAs to new or expanding installations over the past six months, the European Commission said Thursday.

That means some 91.3 million allowances, or 19% of the total pot of 480.2 million units for the 2013-2020 period, have now been either handed out or allocated for distribution between 2016 and 2020.

The permits have been put aside to help companies joining the EU’s carbon market during this third trading phase or those looking to significantly expand capacity.

In its latest update, the Commission said a total 369 installations will benefit from these free allowances.

Some 6.5 million EUAs handed out between 2013 and 2015, plus a further 9.5 million to come in 2016-2020, will be divvied up between 126 new installations.

On top of these, another 28.9 million EUAs issued since 2013 plus 46.4 million to be distributed over the next five years will be split among a further 243 plants that have significantly increased capacity.

The EC in January said it had distributed and earmarked a total 69.6 million allowances to 247 installations, meaning the number of plants benefiting from the free permits has increased by 50% since the last update.

UNALLOCATED EUAs

Separately, the EU’s executive on Thursday said a total 165.4 million free EUAs remain unallocated during 2013-2015 as a result of plants that have fully closed, partially ceased operations, reduced capacity by at least 10%, or are no longer regulated by the EU ETS.

That pot has increased by 65.3 million allowances, or 65%, so far this year, following 40.7 million and 59.4 million EUAs given up in 2013 and 2014 respectively.

The Commission warned that 2015’s unallocated allowances would likely increase further as some member states were late in submitting data.

The EC also noted that under the rules for the bloc’s MSR agreed by EU lawmakers in May, these 165.4 million allowances plus the 388.9 million left in the NER would be placed in the reserve were it to begin today.

The EC said it will publish its next update on the allocation of allowances from the NER in Jan. 2016, and its next update on unallocated free allowances next July.

By Mike Szabo – mike@carbon-pulse.com

Comment