EU Emissions Trading Scheme: Phase 2
Phase II of the scheme is due to start on 1 January 2008 and will run until 31 December 2012, a period of 5 years. It is this phase that coincides with the first Kyoto commitment period. The structure of the scheme will be similar to Phase I and the UK has broadened the scope of the scheme to cover additional carbon dioxide (CO2) emissions from glass, mineral wool, gypsum, flaring from offshore oil and gas production, petrochemicals, carbon black and integrated steelworks.
The Government has finalised the UK's Phase II National Allocation Plan (NAP) and it has been approved by the European Commission. The NAP can be found on the Defra: EU ETS - UK National Allocation Plan (Phase 2) webpage.
The UK's overall cap represents an annual reduction of 29.3 million tonnes of CO2 against projected business as usual emissions for Phase II. The Government will be auctioning 7% of allowances, as well as any surplus from the New Entrant Reserve. There will also be an 8% limit on the use of Kyoto project credits.
Further information about Phase II, including details of previous consultations leading up to the production of the Phase II NAP and the Government's approach to Phase II which was published on 31 March 2005 can be also found on the Defra website.