DEPARTMENT FOR
ENVIRONMENT, FOOD AND RURAL AFFAIRS News Release (Information
Bulletin ref:114/08) issued by The Government News Network on 25
April 2008
Information Bulletin
The UK has confirmed that it will cancel the remaining allowances
in the Phase I New Entrant Reserve. The total number of allowances
remaining after all applications had been received, was
approximately 5.9m allowances.
Given the over-allocation of allowances in Phase I and the
current market conditions Ministers do not consider that it would
be appropriate to sell those left in the New Entrant Reserve.
These allowances will be cancelled at the beginning of May in the
same way as all other Phase I allowances.
Last year, 5.8m allowances from the New Entrant Reserve were sold
through Barclays Capital, with the revenue raised going into the
consolidated fund.
Notes to editors:
1. The EU ETS is the central plank of EU climate change policy.
The UK is committed to building on the EU ETS as its main way of
pricing carbon in the economy, to ensure emissions are effectively
limited and combat the serious threat of climate change. The
scheme commenced on 1 January 2005. The first phase ran from
2005-2007. The second five year phase started on 1 January 2008
and runs until the end of 2012.
2. The scheme works on a 'Cap and Trade' basis. EU
Member States are required to set an emission cap for all
installations covered by the Scheme. Each operator is then
allocated allowances for the particular commitment period in
question. The number of allowances allocated to each installation
for any given period, (the number of tradable allowances each
installation will receive), is set down in a document called the
National Allocation Plan.
3. The New Entrant Reserve was created to provide allowances to
installations that started operation between 31 December 2003 and
31 December 2007, that would not otherwise have received
allowances. The National Allocation Plan allows for surplus
allowances to be sold or cancelled, subject to certain conditions.
Allowances from Phase I are not valid for use in Phase II of the scheme.
4. More information on EU ETS is available at: http://www.defra.gov.uk/environment/climatechange/trading/eu/index.htm
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