Based on a political agreement made by the EU council in 2008, 10 new EU member states were allowed to apply for exceptions to the tightened regulations of the EU emissions trading scheme (ETS) after 2013.
These states are allowed to freely distribute a significant number of ETS allowances to electricity generation companies that would otherwise be subject to a public auction. The aim of this exception was to provide an impetus for further modernization of the electricity generation sector in the countries concerned.
However, the plans presented by the Polish, Romanian, and Czech governments instead provided a massive boost to coal power plant investments, both new and existing. The approach of these states went clearly against the objective of the exception, aiming at reimbursement of “business as usual” investments with minimum potential to modernize their energy sectors and thereby failing to promote a transition towards less carbon-intensive electricity production.
Together with leading European NGOs, we promoted the strict implementation of the requirements established by the Directive at the EU level.