Malta still not compliant with EU emissions scheme

Malta is one of only four EU member states that are still not fully compliant with the Emissions Trading Scheme that promotes the reduction of greenhouse gas emissions at the least cost to the economy.

For the first time yesterday, Brussels released the 2005 carbon dioxide (CO2) emissions data and compliance status of more than 9,400 installations in the 25 member states covered by the scheme.

Data related to Malta, however, was not included because its emission allowance register is not yet operational, according to the Commission.

Malta is already facing legal action over the issue, Commission sources said yesterday.

Last month, the Commission sent a first warning letter calling on Malta to comply with the EU regulations which stipulate that member states have to set up a national registry in the form of a standardised electronic database.

This should have been complied with by the end of 2004. Poland, Cyprus and Luxembourg are still not in line with these rules. According to regulations governing the Emissions Trading Scheme, all installations that are participating are not given emission allowances in printed form, but these are held in accounts in electronic registries set up by the respective member state. These registries are linked so that companies can directly trade with each other.

The registries system keeps track of the ownership as a banking system keeps track of the ownership of money. All transactions go through the "Community independent transaction log" to allow a central administrator at EU level to check each transaction for irregularities.

As Malta does not yet have this registry in place, Maltese participating installations can trade allowances on a forward basis but are deprived of spot trading until the link is made. In Malta's case, only the Enemalta power stations in Marsa and Delimara are involved because no other plants produce emissions in high amounts.

The scheme was launched last year. Installations are allocated a certain number of carbon dioxide emission allowances by their governments per year (one allowance gives the right to emit one tonne of carbon dioxide). Installations that keep their emissions below their total of allowances, for instance by investing in more energy-efficient equipment, can sell their surplus allowances to those that emit more than their allocated allowances. This "cap and trade" approach ensures that emissions are cut wherever it is cheapest to do so.

In its first report, the Commission said that the 21 member states with active registries have allocated an annual average of 1,829.5 million allowances to installations in the scheme's first trading period, covering 2005 to 2007.

In addition they have put aside an annual average of some 73.4 million allowances for new installations or for auctioning purposes. The Commission said that independently verified emissions data for installations operating in these 21 member states amounted to about 1,785.3 million tonnes for 2005.

Later this year the Commission is expected to review the current scheme to see whether adjustments ought to be introduced after 2012 when a new Kyoto protocol is expected to come into force.