Several positives resulting from the Phase 1 "learning by doing" exercise assisted the ETS in making the Phase 2 process run more smoothly, including: (1) greatly improving emissions data, (2) encouraging development of the Kyoto Protocol's project-based mechanisms

European Emissions Trading System Phase III<br /> A First Overview

Vasileios D. Bizios | Solar Technologies S.A

The European Union’s (EU) Emissions Trading Scheme (ETS) is a cornerstone of the EU’s efforts to meet its obligation under the Kyoto Protocol. It covers more than 10,00 energy intensive facilities across the 27 EU Member countries; covered entities emit about 45% of the EU’s carbon dioxide emissions. A “Phase 1” trading period began January 1, 2005. A second, Phase 2, trading period began in 2008, covering the period of the Kyoto Protocol, with a Phase 3 proposed for 2013.
Several positives resulting from the Phase 1 “learning by doing” exercise assisted the ETS in making the Phase 2 process run more smoothly, including: (1) greatly improving emissions data, (2) encouraging development of the Kyoto Protocol’s project-based mechanisms — Clean Development Mechanism (CDM) and Joint Implementation (JI), and (3) influencing corporate behavior to begin pricing in the value of allowances in decision-making, particularly in the electric utility sector.
The latest meetings (including Copenhagen ,Cancun and Bone) of the UNFFCC had set new standards and new goals in order to achieve a 80% energy efficient era for Europe.
Moreover the goal of the triple 20 (20% reduction of CO2 emissions, 20% low carbon energy efficiency, by the end of 2020) was thoroughly reviewed.
"The full implementation of the Cancun agreements can only become an important step forward for the climate if there's a responsible and clear way ahead on the Kyoto Protocol," Figueres said.
The new targets that where set after the last meeting of the UNFFCC can be concluded to the following :
The European Emissions Trading Scheme will be developed into the flagship of the EU climate policy and expanded to more and more sectors and greenhouse gases. At the same time the available quantities and the share of cost free allocated certificates ( including EUAs ) will be further reduced in order to increase the incentives for the emission trading measures. Since the publishing of the the draft of allocation rules in October 2010, companies know to what extent the y can expect free allocation of emission allowances.
  • In specific , from 2013 and onwards the emission allowances will be periodically auctioned instead of mostly issued for free. At least 50% of the annual total amount of EUAs will be auctioned with a rising share till 2020
  • Sectors, which will not be included in the EU TS in the period 2013 – 2020 , should achieve an emission reduction of 10% by the 2020 from 2005 levels.
  • Installations which solely produce electricity will no longer receive any free allowances. Contrary to this , transition regulations will apply to the manufacturing industry as well as to heating sector. Here auctioning will be gradually produced ; in 2013 – 80 % of the calculated volume will be allocated free of charge. This share will be eventually reduced to 30% by 2020.
  • Unlike period 2008 – 2012 there will not  exist any National Allocation Plans (NAP). The emission caps will also be defined EU- wide. The harmonized allocation rules are transformed into National Implementation Rules (NIM).
    (These Implementation Rules will most likely come into effect in the second quarter of 2011)
  • After 2011 the allocations will be based on benchmarks and Historical Activity Level (HAL).
  • The Actual Allocation is further influenced by the “Carbon Leakage Exposure Factor” As long as the installation / sub-installation is subject to Carbon Risk , a specific factor (from 0.5 to 1 ) will be applied
  • The annual maximum quantity of certificates in the manufacturing sector is derived from the EU – CAP and it must not be exceeded. Its necessary , the EU Commission can set a common correction factor (Cross – Sectoral Correction Factor, CCF) for the final calculation of the allocation quantities.
  • Relevant allocation quantities will be mainly based on three benchmarks
    • Refinery Products: 29.5 kg CO2 / CWT
    • Raw Iron : 1,328 Kg CO2 /t
    • Cement clinker : 766 CO2 /t 
The starting point of the definition of the product benchmark , is according to the directive the average performance of the 10% most carbon – efficient installations in a sector or subsector of a country by the years 2007 -2008.
  • The allocation of auctioning profits among the member states is regulated to the following
    1. 88% go directly to the 27EU Member States on the basis of Historical Emissions
    2. 10 % “ for the purpose of solidarity and growth “ in the Community of the 19 member states with a below average GDP ( Gross Domestic Product)
    3. 2% to the member states wich already in 2005 had a chieved a reduction of at least 20% compared with their reference year set by the Kyoto Protocol ( 9 Member States)  
  • Emissions from shipping and aviation will also be include to the obligates of reduction

The effects of these new rules set or planned by the UNFFCC will lead to
  1. Boost of Emission reduction units that originate from Renewable energy Projects   ( the exclusion of the sole producers of energy from the free allocation plans is the main cornerstone to this.)
  2. Larger shares for the auctioned electricity certificates in 2013 , cost free allocated industry certificates and presumably cost free allocated certificates in Eastern Europe will lose their significance in contrast to the auctioned certificates.
  3. Share of the Eu- wide auctioned certificates will increase from 55%in 2013 to about 75% in 2020 .
  4. Expect from the auctioned certificates , the reduction units that come from Renewable energy projects , or carbon reduction projects would be the only resource of emission reduction units . This hopefully will lead to the simplification of the procedures in order to register such projects and also to the rise of the ERUs price.
  5. The CER/ERus quota will not affected by the allocation rules.
** Developing nations want an extension to the agreement, but Japan, Australia and Russia have said that they will have no part in a new deal without the world's two biggest polluters, China and the US.

** As one of the developing nations, China did not have to make anything more than voluntary commitments, while the US refused to ratify the Kyoto Protocol and has given little indication that it would agree to any legally binding pledges in the future.
**Any deal on a second phase of Kyoto will have to be agreed in Durban later this year, leaving investors worried that a gap in regulation will create unacceptable levels of uncertainty for the $20bn carbon market, and undermine green energy projects in developing nations.
Development of the European Emission Trading Schene in Phase III
Phase III study
By Solar Technologies S.A / CARBONSOLAR

Born 1985,Vasileios Bizios is an MSc. Mechanical Engineer & Aeronautics Engineer. He has graduated the University of Patras and his Msc is based in the areas of Aeronautics , Experimental Fluid Research and Energy.. Thus, in 2006 he accepted his first position as an Assistant of Professor Dr.Dionysius D. Margaris at the University’s Department of Mechanical and Aeronautical Engineering Laboratory where he gained extensive experience in the field of Fluid Research. Also during his college years he worked as an assistant at the laboratory For Manufacturing Systems and Automation. He is an active member of EUROAVIA and Upatras student Association. He graduated in 2010. His thesis was ‘Construction and experimental research of a subsonic widtunnel test section. He has numerous letters of recommendation from his Professors.

Recognized as a high-potential executive, in 2009, Bill’s career took a ten-fold leap in responsibility when he was sought out by Solar Technologies S.A and accepted a project developers position concerning Photovoltaic and wind Renewable Energy resources. Easily making the transition from project developer to Carbon Trading Research executive in 2010.Such a demanding research took place in the rather hostile (for new ideas )country Greece. He didn’t disappoint, championing the complete overhaul and modernization of the company’s possibilities to evolve in a Carbon Trading company.

Today, Vasileios Bizios resides Greece,. While open to opportunities, he has focused his search on CO2 or other senior technology executive roles in financial services, trading, acquisition-oriented, and other complex, information-intensive companies. Bill can be reached at 210-6198908 / and he maintains a personal mail ( with additional information regarding his career and his credentials.

The content & opinions in this article are the author’s and do not necessarily represent the views of AltEnergyMag

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