EU commission to rap Malta over emissions plan

Malta is today likely to be one of the countries against which the European Union will initiate proceedings for not yet having presented its National Allocation Plan (NAP) for greenhouse gas emissions.

Sources in Brussels said the Commission would today decide on initiating action against those states that have not furnished an adequate plan.

Under the EU Emissions Trading Directive, Malta must set limits on the greenhouse gas emissions produced by industrial installations of a significant size.

It must present these limits in the form of a National Allocation Plan. For the period 2005-2007, limits are to be applied to the two Enemalta power plants.

Malta's plan has been discussed with various stakeholders and the public was invited to submit comments. Taking account of the country's present circumstances, it proposes limits that provide for growth in emissions consistent with projections of growth in electricity demand.

The cabinet is set to discuss Malta's NAP during next Monday's meeting and subsequently it will be sent to the commission.

It is normal for the commission to stop the procedures that would have been initiated when reports are submitted soon after the expiry of a deadline.

Under this scheme, each member state adopts a NAP allocating emissions allowances to entities that produce significant volumes of greenhouse gases. An entity that exceeds its annual allowance will be fined. Through emissions trading, an entity that has an allowance in excess of its actual needs may sell its surplus to an entity that expects to overshoot its allowance. Depending on the market price for the transaction, the latter thus has the option of buying its way out of a higher financial penalty.

The emissions trading scheme is intended to help the EU to achieve in a cost-effective manner its Kyoto Protocol targets for limiting greenhouse gas emissions. It will start on January 1, 2005 for an initial three years, 2005-2007.

Each NAP is subject to scrutiny by the commission and the other member states, in particular to guard against the allocation to enterprises of overly generous allowances that would infringe competition rules.

To ensure the proper functioning of the market in emission allowances, each member state must maintain a registry of its allowances and transactions. Related monitoring and reporting requirements are specified.