Factor

EU sticks to carbon reporting deadlines, rejects industry calls for coronavirus delay

27 March 2020 | Mitigation

 

An EU-wide April 30 deadline for firms to surrender emissions trading system (ETS) carbon allowances will stand, the European Commission said, despite calls from the industries to extend it due to the coronavirus pandemic.

Industry, utilities and airlines running flights in Europe must report their ETS emissions for the previous calendar year by 31 March, and surrender enough carbon permits to cover these emissions by 30 April under the bloc’s ETS rules.

The European Commission said on Thursday (26 March) it recognised that the coronavirus crisis might make it difficult for companies to submit verified emissions reports by the end of March, but the existing rules provide flexibility around this deadline.

National authorities can make a “conservative estimate” of emissions for firms that miss the March deadline, so long as this is done in time for the April compliance deadline, it said.

“The Commission underlines the importance of the timely surrender of allowances by the mandatory deadline of 30 April 2020,” it added.

Some industrial lobbies had asked the Commission to delay this year’s carbon market compliance deadlines, arguing that firms were struggling to have a verifier check their reported emissions matched actual production.

Firms that left this to the last minute face the problem that coronavirus has shut factories and kept staff at home.

But the Commission dismissed those calls, saying the existing rules allow for verifiers to check emissions without carrying out site visits under certain conditions.

Organizations said a prolonged delay to compliance deadlines would have disrupted the carbon market.

The EU uses firms’ annual emissions data to work out how many surplus permits are in the ETS. A market stability reserve (MSR) then removes a share of these permits, to avoid a build-up of oversupply that could depress the carbon price.

If the MSR cannot do its job, it would cause “major regulatory uncertainty” and upset the market’s balance.

Germany’s emissions agency – which oversees ETS data at a national level – had previously indicated it may waive financial penalties for companies that miss compliance deadlines.

Others disagree. The Swedish Energy Agency said it had not received indications that domestic firms would miss compliance deadlines this year.

 

Source: EURACTIV