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The UK Government has published for consultation its draft National Allocation P ...

The UK Government has published for consultation its draft National Allocation Plan setting out how greenhouse gas emission allowances will be allocated to the operators of UK installations for the first phase of the EU Emissions Trading Scheme (EU ETS), which runs from 2005 to 2007. The plans will help the government meet its national goal of moving towards a 20% reduction in emissions of carbon dioxide (CO2) by 2010. The initial allocation of allowances for the first phase of the scheme is consistent with an overall reduction in UK CO2 emissions of 16.3%. However, the overall level of allowances to be allocated in the UK in phase 2 of the scheme (which runs from 2008-2012) will be strengthened to be consistent with the trading sector’s contribution to achieving the 20% goal. Secretary of State for Trade and Industry, Patricia Hewitt said: ‘The allocation of emission allowances set out here is central to our work in taking forward the Energy White Paper. It is designed to achieve the UK’s climate change objectives while safeguarding security of supply and supporting the international competitiveness of UK industry. On top of the substantial reductions in carbon dioxide emissions that we expect from the operation of the scheme, there will be opportunities for UK firms to gain from the international trading in carbon that should follow. I recognise that this is a key policy for many businesses and we would urge industry to carefully consider the proposals. We welcome their views on the consultation document.’ The EU Emission Trading Scheme is the most significant measure in the EU Climate Change Programme. The objective of the scheme is to reduce, in the most cost-effective way, EU emissions of greenhouse gases that contribute to the problems associated with global warming. The UK Government has stated in its Energy White Paper that the EU ETS will be a central plank of its future emissions reduction policies. Each EU Member State is required to draw up a National Allocation Plan (NAP) for submission to the European Commission by the end of March 2004. The Plan has to set out the total number of emission allowances, each representing one tonne of CO2, to be allocated to the industry sectors covered by the EU ETS. It also has to show how this total allocation is to be distributed between individual installations included in the scheme. From the beginning of 2005, the EU ETS will for the first time impose requirements on the largest individual emitters of CO2 to monitor and account for their emissions. The installations covered include the electricity generation industry; oil refineries; the iron and steel industry, the minerals industry, and paper, pulp and board manufacturing. Together, the installations covered by the scheme account for about 50% of all UK CO2 emissions. To view the consultation document, visi There is also a summary of the EU ETS on

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