1. Assessment of the possible development of an EU-wide NOx and SO2 emissions trading scheme for IPPC installations
Stakeholder meeting
Friday 3rd April 2009
Questions and exchange of views

2. Structure of discussion
Type of scheme
Allocation method
Emission rate
Trading zones
Coverage
Opt-in and opt-out
MRV

3. Please send additional feedback by 8 May 2009 to
Lucia Lavric at or
Alistair Ritchie at

4. Options for trading scenarios Type of Scheme
Cap & Trade: Design Risks
Higher cost/ unit of product than projected
Cap and Trade
Allocation = Emission rate * Production (historical / projected)
Baseline and Credit
Allocation =Emission rate * Production (actual)
Hybrid
Allocation = Emission rate * Production * Adjustment Factor
(to achieve emissions target)
Windfall profit (under free allocation)
Baseline & Credit: Design Risks
Lower emission reductions than anticipated

5. Options for trading scenarios Allocation Method
All allocation methods apply to all types of trading schemes

6. Options for trading scenarios Emission Rate
Upper BREF BAT AEL
Intermediate BREF BAT AEL
Lower BREF BAT AEL
Notes:
No distinction between Cap & Trade and Baseline & Credit
Expect to apply to allocation to individual installations and overall cap

7. Options for trading scenarios Trading zones
Geographic scope of trading zones for IPPC installations
MS level
Different groups of MSs
EU 27

8. Options for trading scenarios Coverage
All IPPC installations covered by the EU ETS (revised)
All IPPC installations covered by the EU ETS >=50 MW capacity
Installations that meet specific coverage criteria

9. Options for trading scenarios Opt-in and opt-out
Depends on coverage: full mandatory coverage is not compatible with individual installation opt-ins and opt-outs
Depends on type of scheme: under Cap & Trade opting in entails gaming risks
Depends on MRV provisions and treatment of small emitters
May entail opt-out provisions for MS, depending on MRV provisions

10. Options for trading scenarios Monitoring, reporting and verification (MRV)
Collate and review MRV requirements for SO2 and NOx for IPPC installations
Review practices in SO2 and NOx trading schemes
Assess EU ETS MRG for CO2
Determine desirable features of MRV of SO2 and NOx in an emissions trading scheme
Identify preferred options