Many large factories and energy companies emit greenhouse gases such as CO2. Pursuant to the Kyoto Protocol and the Climate Convention, emissions trading is used to reduce the emissions of such greenhouse gases from the industry and the energy sector.
Emissions trading (Energy law)
Many large factories and energy companies emit greenhouse gases such as CO2. Pursuant to the Kyoto Protocol and the Climate Convention, emissions trading is used to reduce the emissions of such greenhouse gases from the industry and the energy sector. Emissions trading in the Netherlands is governed by the European emissions trading system, the EU ETS. Within the EU ETS, a limit of emission rights has been established that is equal to the total allowed emission of CO2. This limit is derived from the reduction targets that the EU wants to achieve and ensures that the emissions of all companies under emissions trading do not exceed the set target.
A company participating in an emissions trading scheme receives an annual amount of free emission allowances. This is calculated partly on the basis of previous production levels and benchmarks for the CO2 efficiency of the company’s production process. An emission allowance gives every company the right to emit a certain amount of greenhouse gases and represents 1 tonne of CO2 emissions. Is your company eligible for the allocation of emission rights? Then it is important to properly calculate how much CO2 your company emits each year in order to receive the right number of emission rights. This is because every year, each company has to surrender the same number of emission rights as it has emitted in tonnes of greenhouse gas.
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Companies that emit more greenhouse gases than it has emission allowances to surrender risk being fined. Is this the case for your company? If so, you can buy additional emission allowances in order to avoid a fine. You can not only buy additional emission allowances from, for example, traders in emission rights such as banks, investors or trading agencies, but you can also obtain them at an auction. However, it may also be the case that your company emits less greenhouse gases and therefore retains emission allowances. In that case, you can choose to start trading these emission allowances. Before you are able to trade emission allowances, an account in the EU Registry where the allowances are located must be opened. This is because the EU and/or the UN wants to register and check every transaction.
Before you can participate in an emissions trading scheme, your company must have a valid permit. After all, companies in the Netherlands are not allowed to simply emit greenhouse gases and, provided they fall under the scope of the Environmental Management Act, must apply for an emission permit from the Dutch Emissions Authority (NEa). In order to qualify for an emission permit, your company must draw up a monitoring plan and have it approved by the NEa. If your monitoring plan is approved and the emission permit is granted, you must then keep the monitoring plan up to date so that the document always reflects the actual situation. You are also obliged to submit an annual verified emissions report to the NEa and to enter the data from the emissions report into the CO2 Emissions Trading Register.
Does your business deal with emissions trading and do you have any questions or problems with regard to this? Or do you want help with the application for an emission permit? In both cases you have come to the right place. Our specialists focus on emissions trading and know how they can help you.
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