The commission of the European communities published on the 23rd January 2008 the COM(2008) 16 final related to a proposal for a directive of the european parliament and of the council amending the Directive 2003/87/EC in order to improve and extend the greenhouse gas emission allowance trading system of the Community. On 1 January 2005, the European Emission Trading System (EU ETS) started operation. It represents the spearhead (Emissions Trading Scheme) of EU climate policy due to its ability to achieve absolute emission reductions in an economically efficient manner.

The contribution of small and large emitters to the overall emissions covered by the EU ETS is uneven: the largest 7% of installations represent 60% of total emissions, while the 1 400 smallest installations (approximately 14%) only account for 0.14%. For this reason, the cost-effectiveness of small installations' contributions to emission reductions might be improved. While the currently applicable threshold of 20 MW of rated thermal input for combustion installations will be maintained, it should be combined with an emission threshold of 10 000 tCO2/yr (but excluding emissions from biomass), as long as their rated thermal input does not exceed 25 MW. This means that combustion installations with a rated thermal input of more than 20 MW, but less than 25 MW and an annual emission of less than 10 000 tonnes of carbon dioxide in each of the three years preceding the year of application, can be excluded from the EU ETS if,

• as a matter of fairness, and in order to ensure that the internal market will not be distorted, there are measures (such as taxation) in place that will achieve an equivalent contribution of installations excluded from the system to the overall emission reduction objectives.
• Member States apply to the Commission for excluding installations and continuing such measures and monitoring, and the Commission does not object within a period of six months.

In view of the long-term potential for emissions reductions from CCS, and pending the entry into force of Directive 2008/xx/EC on the geological storage of carbon dioxide, installations undertaking the capture, transport and geological storage of greenhouse gases should be included in the Community system.

More information
Full details of the official proposal.