This item was published during the term of a previous administration that ended in April 2007
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Action on Climate Change
24/05/2005
Limits on carbon dioxide emissions for installations
across Scotland were published today.
The National Allocation Plan places limits on nearly 120
of Scotland's largest emitters, covering over 40 per cent
of Scotland's carbon dioxide levels.
Environment Minister Ross Finnie announced the plans,
forming part of the EU Emissions Trading Scheme, which
allows organisations to trade in the emerging European
carbon market. The scheme will drive down carbon emission
levels in a cost-effective manner.
Mr Finnie, said:
"The Scottish Executive is committed to tackling the
causes of climate change and adapting to its unavoidable
impacts.
"In global terms, Scotland's greenhouse gas emissions
are small but are still important in terms of the
contribution to climate change. As a developed country,
Scotland must work with other developed nations to limit
its emissions.
"Our objective is to strike a fair balance between the
need to protect the environment and the needs of our
economy and society. Emissions trading will be a major
contributor to this by offering a flexible and
cost-effective way to achieve emission reductions.
"Today's announcement offers certainty on emissions
allocations for the next three years to organisations
involved in Scheme.
"Emissions trading now provides an added incentive for
Scotland's largest emitters to contribute to wider efforts
to protect our planet for future generations".
The UK Registry, which enables allowances to be
transferred to other accounts both within the UK and in
other participating countries, will go live this week.
EU Emissions Trading Scheme
The EU Emissions Trading Scheme (EU ETS) is one of the
policies being introduced across Europe to tackle emissions
of carbon dioxide and other greenhouse gases and thereby
combat the serious threat of climate change. The Scheme
commenced on 1 January 2005. The first phase runs from
2005-2007 and the second phase will run from 2008-2012 to
coincide with the first Kyoto Commitment Period.
Emissions (initially carbon dioxide - the most
significant of the greenhouse gases causing global warming)
are reduced by a fixed amount overall but at least cost to
regulated sources. EU Member State governments are required
to set an emission cap for all installations covered by the
Scheme. Each installation is allocated tradeable carbon
dioxide emission allowances for the phase in question.
If a participant manages to reduce emissions to below
the level of allowances allocated to it, they will have a
surplus of allowances left over. These surplus allowances
can be kept for use in future years in the phase, or can be
sold to other participants. Alternatively, a participant
may choose to allow their emissions to rise above the level
of allowances allocated to it, and instead buy extra
allowances from others to cover the shortfall.
Emissions trading therefore provides an incentive for
participants to reduce their emissions to below the level
of allowances allocated to them, as they can sell the
surplus to others. Consequently, those participants who are
able to reduce emissions at a relatively low cost will do
so, while those participants for whom the costs of reducing
emissions are very high, are likely to choose to buy
allowances from others rather than reducing their own
emissions.
National Allocation Plan
Each EU Member State is required to produce a National
Allocation Plan (NAP) setting out the total quantity of
allowances that it intends to allocate for the period in
question. This is a devolved matter and the UK NAP was
developed by the UK Government and the Devolved
Administrations.
Energy intensive industries, such as electricity
generators, oil refineries and manufacturing plants, are
included in the EU ETS. 116 Scottish installations,
responsible for over 40%per cent of Scottish carbon dioxide
emissions in 2002, are included. The effect of the Scheme
in Scotland is expected to reduce carbon dioxide emissions
by around 6.5 million tonnes below projected emissions of
the installations covered by the Scheme over the next 3
years.
A copy of the
UK National Allocation Plan, and
allowances for installations covered by Phase 1 of the
Scheme published today, can be found on the Executive's
climate change website at
www.scotland.gov.uk/climatechange.