In 2009 there was a further development in the EU emissions trading scheme when the commitment to phase 3 of the plan was taken up. Phase 3 will not start until 2013, but it was a key indication of the need for the plan, that in 2009 the global market recorded that over £70bn of Carbon had been traded. It showed great success from the Kyoto Protocol that carbon was being traded so successfully. So what is the next part of the carbon emissions trading scheme? What will change? We currently (between 2008 and 2012) have developed what was known as a national plan which limits or which caps the emissions from that member state (with regard to certain installations – the installations I am talking about are the biggies – the oil companies, the steel industry and all those types of areas).
The National Allocation plan has to be approved by the EU which is not always easily achieved. Once this has been done the cap get converted into allowances and the big companies are then told how much carbon they are allowed to emit. Obviously there is a huge amount of recording and administration involved in this process and an audit is carried out at the end when the installations have to say how much they have spent/used. This will change in phase 3 as the scheme will be designed at Euro level and not by each country and gradually the cap for each country will be reduced.