National Allocation Plan

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The National Allocation Plan involves the mapping of how many European Union Allowances are granted to involved parties. In 2003 the European Union passed a directive establishing a European Union Emission Trading Scheme to cap carbon dioxide emissions. Part of the directive established a market-based mechanism for emitters of CO2 to either reduce emissions or purchase emission permits from sellers in the EU with excess supply.

The 2003 directive provided that each of the 25 member states of the EU submit a National Allocation Plan, or NAP, outlining how many initial European Union Allowances were to be granted to industry participants. Approximately 45% of EU industry is subject to the directive, with an aggregate of 6.572 billion EUAs in the process of being issued for the three years of 2005 to 2007.^[1]

In 2006, the European Commission decided on the first 10 national plans for allocating CO2 emission allowances to energy-intensive industrial plants for the 2008-2012 trading period under the European Union Emission Trading Scheme (EU ETS). The EC reduced the allowances by almost 7% below the emissions proposed by the national allocation plans and 7% below the 2005 emissions. In so doing, the EC confirmed its strong commitment to ensuring that the EU and member states achieve their greenhouse gases emission targets under the Kyoto Protocol. The plans concerned Germany, Greece, Ireland, Latvia, Lithuania, Luxembourg, Malta, Slovakia, Sweden and the U.K. They account for 42% of the allowances allocated in the first trading period of the EU ETS, from 2005 to 2007.^[2]

References

1. ↑ Market for EUAs Thrown into Confusion Over Court Ruling. SRI Media. Retrieved on March 21, 2008.
2. ↑ EC Decides on National Allocation Plans for 2008-2012 Emissions Trading Period. IHS. Retrieved on March 21, 2008.