Ireland’s National Allocation Plan

2008 – 2012

The Environmental Protection Agency (EPA) submitted Ireland’s second National Allocation Plan to the European Commission in Brussels as required under the Emissions Trading Directive on 13 July 2006.

The plan sets out how Ireland will achieve its commitments under the Kyoto Protocol on Climate Change and details how carbon allowances in the trading sector will be distributed between participating activities in the five-year period 2008-2012.

Ireland’s commitment under the Kyoto Protocol is to limit greenhouse gas emissions to an average of 13% above base year (1990) emissions in the period 2008-2012. Recent data shows emissions for Ireland in 2004 at 23% above the base year emissions.

Emissions Trading is a cap and trade scheme where participating installations are given a fixed allocation each year and must either abate CO2 emissions to that level - or purchase allowances to meet any exceedance. It is designed to bring about reductions in emissions at least cost. In 2005, Ireland was one of only four EU countries where allocations to the trading sector were below actual emissions in the year.

Over 100 major industrial and institutional sites in Ireland are covered by the plan. These include power generation, other combustion, cement, lime, glass and ceramic plants and oil refining. Also included are large companies in areas such as food & drink, pharmaceuticals and semi-conductors - together with a number of our larger institutions, such as universities.

Under this new plan, the total quantity of allowances to be allocated in the period 2008-2012 represent 88% of forecasted emissions in that period - with the burden falling mostly on the power generation and cement sectors, due to their ability to pass through the costs involved. New entrants to the scheme in the 5-year period are catered for through specific set aside of allowances. Commenting.

Dr. Mary Kelly, Director General of the EPA said - “By submitting the National Allocation Plan to the EU Commission, we have now achieved an important milestone towards finalising an allocation plan for the key 'Kyoto' period 2008-2012. Emissions Trading is a very important element of our national commitment to achieve reductions in greenhouse gas emissions, in order to address the ever more serious global problem of climate change. By allocating just 88% of anticipated needs, the plan ensures that participating installations will contribute to the reductions required.”

Dr Kelly particularly thanked the National Allocation Advisory Group for their considerable input and valuable advice, which had greatly assisted the timely completion of the Plan.

To view the National Allocation Plan 2008-2012 as notified to the Commission - Click Here

The Commission has three months to carefully examine national plans from the 25 EU Member States following their submission and may reject any aspect of a Plan that they feel is not compatible with the Directive.

Key Elements of the National Allocation Plan (2008-2012)

• The total allocation of allowances is 113.19 million for the second emissions trading period - an average of 22.638 million allowances per annum for the five years 2008 –2012;
• Over 94 per cent of the these allowances will be allocated free of charge to existing installations;
• Allocations will be made based on historical emissions from existing participants;
• Approximately 5 per cent of the available allowances will be held back by the EPA for issue to new entrants not in the scheme as existing installations on 30 June 2006;
• Adjustment for increased use of renewables in electricity production, Combined Heat & Power (CHP) to receive special treatment;
• Where companies close during the Kyoto phase, the EPA will withhold the issue of allowances for future years to these companies (subject to allowing installations that close retain 75 per cent of their annual allocation - up to a maximum of 25,000 allowances per annum - for the remainder of the period). Allowances retained in this way will be added to the new entrant set aside;
• 0.5 per cent of allowances are to be sold to defray the expenses of administering the emissions trading scheme.