The EU Legal Frameworks - The Sustainability of Renewable Energy in Europe - page 13

Decision No. 1600/2002/EC of the European Parliament and the council lays
down the Sixth Environment Action Program for the period 2002-2012 (European
Commission 2002b ). Such decision, defining climate change as a top priority for
community action, requires a demonstrable progress in fulfilling the commitments
set by the Kyoto Protocol.
Decision 2002/358/EC, also known as burden-sharing decision, has approved
the Kyoto Protocol on behalf of the entire community with the symbolic deposit
of instruments of ratification simultaneously by the member states on 1 June 2002.
The most important measure contained in Decision 2002/358/EC is redistribution of
individual targets for reduction of GHG emissions between the EU-15, the so-called
burden sharing (European Commission 2002a ).
The heart of the EU legislation on the development of the Kyoto Protocol is
the Directive 2003 /87/EC (European Commission 2003 ) that has introduced a cap
and trade market. The directive has been formulated for the establishment of a sys-
tem for the exchange of GHG emission quotas, called EU ETS, and it also defines
a framework for national policies aimed at reducing emissions. The goal of the
2003/87/EC Directive is to give member states a competitive advantage, starting to
apply the provisions of the protocol relating to the emissions trading 3 years earlier
than the date set by the UNFCCC (2005 instead of 2008). The directive refers to any
matter relating to the generation of a structure permits or allowances and a market
for such permits to industrial plants that emit large amounts of CO 2 .
The Directive defines in particular:
• The constitution from 1 January 2005 of a system of permits for the right to emit
CO 2 for firms engaged in activities listed in the Directive. Permits indicate mode
and frequency requirements for monitoring of emissions, and they are bound by
the obligation to return a number of allowances equal to the emissions released
by plants every year.
• The draft of NAP by all member states. The NAP prepared initially for the period
2005-2007 will subsequently be drawn up every 5 years and indicate how each
country intends to reduce its GHG emissions.
• Granting and validity of emission allowances.
• Transfer and cancelation of allowances.
• Guidelines for the monitoring, reporting, and verification of emission levels.
• Penalties to be applied to noncompliant firms. In the period 2008-2012, the
sanctions amounted to € 100/tCO 2 . In addition, the payment of the fine does not
exempt the firm from the obligation to surrender allowances due, which must be
paid within the next year.
• The designation of a competent authority.
• The establishment of a system of records for the issuance and control of emis-
sions allowances.
• Reports by member states.
From 1 January 2005, all industrial operators and companies have the power to emit
CO 2 only with a permit granted by the national authority.