Closer To Free Allowances For The Power Sector

On 29 March the European Commission adopted the so-called "derogation package", comprising the Decision on the methodology of transitional allocation of allowances to installations for electricity production and the Guidelines concerning the optional application of Article 10c of Directive 2003/87/EC, supplemented by a commentary in the form of Frequently Asked Questions. The wording of the two documents has a significant impact on the possibility of and the rules concerning free allocation of allowances to the power sector after 2012 in Poland and in the new member states that will decide to take advantage of this possibility.

Article 10c of Directive 2003/87/EC (the so-called ETS Directive) envisages that new EU member states may allocate free CO2 emission allowances to the power sector, thus departing from the rule, applicable from 2013, according to which in order to produce electricity one is required to purchase all the necessary allowances. For the Polish