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Trading greenhouse gas emission units (EU-ETS)

Trading greenhouse gas emission units (EU-ETS)

EU-ETS (European Union Emission Trading System) is the European system of trading greenhouse gas emission units.

The basic aim of establishing EU-ETS is to limit the greenhouse gas emissions and gradually decrease them in a cost-effective way. The third period of EU-ETS started in 2013 and it will last by the end of 2020.


Emission units being traded with in EU-ETS

Emission units being traded with in EU-ETS are:
  • European Emission Allowances (EUA)
  • Allowances originating from carrying out projects based on the Kyoto protocol
  • Certified Emission Reduction (CER).
Trading operators may buy emission units on state auction sale, on climate exchanges or by means of bilateral contracts with partners. Emission units differ according to the price and the share, by means of which operators may use them to move them onto the accounts of plant operators in the Union Registry. One emission unit equals to one tonne of carbon dioxide equivalent 1EUA=1CER =1 tonne of CO2 (eq)

Plant operators are obliged to allocate emission units onto accounts of plant operators opened in the Registry by 30 April of the current year for the previous calendar year in the amounts equivalent to verified CO2 emissions.
Information about unit prices of emission units can be found here.


Croatia in EU-ETS

Operators from Croatia, including HEP, joined the EU ETS at the beginning of the third trading period, on 1 January 2013.
The third period of EU-ETS had significantly stricter rules, when compared to the previous two periods. The most important change for energy sector in the third period was no more allocation of free emission units for CO2 emissions, which is a byproduct of fossil fuel combustion for electricity generation, apart from some exceptions which do not refer to Croatia.


HEP and EU-ETS

HEP’s sources trading operators of greenhouse gas emission units are boilers with more than 20 MW nominal power, which emit CO2 and belong to the following operators:
  • HEP-Proizvodnja d.o.o. - TE Plomin 1, TE Plomin 2, TE Rijeka, TE-TO Sisak, TE-TO Zagreb, EL-TO Zagreb, KTE Jertovec and TE-TO Osijek
  • HEP-Toplinarstvo d.o.o. – Plant Osijek
The system of trading greenhouse gas emission units was established in HEP in December 2012.

HEP-Trgovina d.o.o. buys emission units for operators HEP-Proizvodnja d.o.o. and HEP-Toplinarstvo d.o.o. with an aim of prompt transmission onto accounts opened in the Registry and fulfilling prescribed obligation. Following the rules of establishing EU-ETS, plant operators of HEP-Proizvodnja d.o.o. and HEP-Toplinarstvo d.o.o. have the permits from the Ministry of Environment and Nature for greenhouse gas emissions, established monitoring system, reporting and emission verification as well as opened plant operator accounts in the Registry.

Certified verifier does the verification of emission units.

HEP-Proizvodnja d.o.o. and HEP-Toplinarstvo d.o.o. deliver the Emission Report and the Verification Report into the Croatian Environment Agency by 1 March of the current year for the previous year.


Free emission units

European Commission allocates free emission units to HEP’s boilers with more than 20 MW nominal power for the generation of heat energy, which are delivered to the district heating system i.e. the so-called “central-leakage” plants, i.e. plants which are under the risk of transferring their generation into countries which are not EU-ETS operators.

European Commission allocates free emission units to HEP’s plants on the basis of Activity Report, and allocated amounts are subject to change depending on the generation of heat energy for the previous year, according to reports delivered to the Croatian Environment Agency by 15 January of the current year for the previous calendar year.

Free emission units during the third trading period (2013 – 2020) will be allocated by the EC to the following HEP’s operators:
  • HEP-Proizvodnja d.o.o. – TE-TO Sisak, TE-TO Zagreb, EL-TO Zagreb and TE-TO Osijek
  • HEP-Toplinarstvo d.o.o. – Plant Osijek
Allocated free emission units from 2013 to 2015
 
Plant name Number of allocated free emission units
  2013 2014 2015
Plant Osijek 45 402 338
TE-TO Zagreb 200,475 176,365 157,135
EL-TO Zagreb 167,026 143,701 128,557
TE-TO Osijek 59,365 50,913 43,150
TE-TO Sisak 12,021 9,028 12,353
TOTAL 438,932 380,409 341,533