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.

Emission allowances

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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Emissions trading

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.

Emission permit

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.

Legislation in the field of energy suppliers

Do you have to deal with the purchase or sale of energy? Then you know that you can buy electricity both over-the-counter and via the stock exchange. Since with the over-the-counter method one of the parties can go bankrupt, legal support is very important. It is also important that clear agreements are made so that the other party meets its obligations and the supplier does not suffer any losses. Law & More offers support in these activities so that you are not faced with any surprises.

In many cases, the supply of electricity and gas takes place via an electricity or gas network. Persons or companies that supply energy to other consumers are obliged to appoint a network operator. However, there are exceptions to this rule: if, for example, you use a closed distribution system or a direct line, the obligation to appoint a network operator does not apply. A closed distribution system is a business network that is geographically limited and can only have a certain number of customers. Owners of a closed distribution system can apply for an exemption from the obligation to designate a network operator. A direct line exists when an electricity line or gas pipeline connects an energy producer directly to a user of energy. A direct line is not part of a network, so there is no obligation to appoint a network operator in this case.

If you are part of an energy supplier, it is important for you to determine whether there is a closed distribution system or a direct line. This is because different rights and obligations play a role in both forms of supply. However, there are other aspects that you need to take into account. For example, energy suppliers may need a licence to supply gas and electricity to small consumers. In addition, energy suppliers must also take into account the regulations from the Heat Act, which in turn affects the conclusion of heat contracts.

Do you have any questions or uncertainties about energy law for energy suppliers? Then call in the experts of Law & More. We offer legal support to companies and consumers dealing with gas and electricity. Whether you are applying for a licence, drawing up an energy contract or taking part in an energy trade fair, our specialists are at your service.

Emissions trading and certificate trading

As a company, do you have to deal with emissions trading or certificate trading? You have to calculate how much CO2 you emit each year, so that you get an appropriate amount of emission rights. If it is the case that you emit more, because the purchase of your product has been increased, you will need extra emission rights. If you need more large amounts of electricity, you can participate in the certificate trade. In both cases, Law & More’s lawyers will come in handy for you. Our specialists focus on emissions trading and certificate trading and know how to help you if you experience problems with this. So, do you have any questions about emission rights? Do you want to apply for an emission permit? Or do you need advice on emissions trading or certificate trading? Please contact the lawyers at Law & More.

Do you want to know what Law & More can do for you as a law firm in Eindhoven?
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mr. Tom Meevis, advocate at Law & More –
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