Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (OJ L 334, 17.12.2010, p. 17).

Decision (EU) 2015/1814 of the European Parliament and of the Council of 6 October 2015 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading system and amending Directive 2003/87/EC (OJ L 264, 9.10.2015, p. 1).

Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (OJ L 130, 17.5.2011, p. 1).

Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC (OJ L 315, 14.11.2012, p. 1).

Commission Decision 2010/670/EU of 3 November 2010 laying down criteria and measures for the financing of commercial demonstration projects that aim at the environmentally safe capture and geological storage of CO2 as well as demonstration projects of innovative renewable energy technologies under the system for greenhouse gas emission allowance trading within the Union established by Directive 2003/87/EC of the European Parliament and of the Council (OJ L 290, 6.11.2010, p. 39).

Commission Decision 2014/746/EU of 27 October 2014 determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage, for the period 2015 to 2019 (OJ L 308, 29.10.2014, p. 114).

OJ L 96, 12.4.2003, p. 16.

OJ L 140, 5.6.2009, p. 114.

OJ L 240, 24.8.1992, p. 1.

Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC (OJ L 165, 18.6.2013, p. 13).

Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).

OJ L 123, 12.5.2016, p. 1.

OJ L 275, 25.10.2003, p. 32.’

Commission Regulation (EU) No 606/2010 of 9 July 2010 on the approval of a simplified tool developed by the European organisation for air safety navigation (Eurocontrol) to estimate the fuel consumption of certain small emitting aircraft operators (OJ L 175, 10.7.2010, p. 25).

Substituted by Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (Text with EEA relevance).

Inserted by Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community (Text with EEA relevance).

Inserted by Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community (Text with EEA relevance).

Substituted by Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community (Text with EEA relevance).

Substituted by Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community (Text with EEA relevance).

Substituted by Directive 2004/101/EC of the European Parliament and of the Council of 27 October 2004 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol's project mechanisms (Text with EEA relevance).

Inserted by Directive 2004/101/EC of the European Parliament and of the Council of 27 October 2004 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol's project mechanisms (Text with EEA relevance).

Inserted by Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021.

Substituted by Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021.

Deleted by Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (Text with EEA relevance).

Inserted by Treaty between the Kingdom of Belgium, the Republic of Bulgaria, the Czech Republic, the Kingdom of Denmark, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Grand Duchy of Luxembourg, the Republic of Hungary, the Republic of Malta, the Kingdom of the Netherlands, the Republic of Austria, the Republic of Poland, the Portuguese Republic, Romania, the Republic of Slovenia, the Slovak Republic, the Republic of Finland, the Kingdom of Sweden, the United Kingdom of Great Britain and Northern Ireland (Member States of the European Union) and the Republic of Croatia concerning the accession of the Republic of Croatia to the European Union.

Inserted by Decision (EU) 2015/1814 of the European Parliament and of the Council of 6 October 2015 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC (Text with EEA relevance).

Inserted by Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (Text with EEA relevance).

Deleted by Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community (Text with EEA relevance).

Inserted by Regulation (EU) No 421/2014 of the European Parliament and of the Council of 16 April 2014 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions (Text with EEA relevance).

Substituted by Corrigendum to Regulation (EU) No 421/2014 of the European Parliament and of the Council of 16 April 2014 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions (Official Journal of the European Union L 129 of 30 April 2014).

Deleted by Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021.

http://www.legislation.gov.uk/eudr/2003/87/body/2020-01-01Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (Text with EEA relevance)Directive 2003/87/EC of the European Parliament and of the CouncilDirective 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (Text with EEA relevance)2020-12-09King's Printer of Acts of Parliamenthttps://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20200101texttext/xmlen2020-01-01CHAPTER IGENERAL PROVISIONS
Article 1Subject matter

This Directive establishes a system for greenhouse gas emission allowance trading within the Union (hereinafter referred to as the ‘EU ETS’) in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.

This Directive also provides for the reductions of greenhouse gas emissions to be increased so as to contribute to the levels of reductions that are considered scientifically necessary to avoid dangerous climate change.

This Directive also lays down provisions for assessing and implementing a stricter Union reduction commitment exceeding 20 %, to be applied upon the approval by the Union of an international agreement on climate change leading to greenhouse gas emission reductions exceeding those required in Article 9, as reflected in the 30 % commitment endorsed by the European Council of March 2007.

Article 2Scope1

This Directive shall apply to emissions from the activities listed in Annex I and greenhouse gases listed in Annex II.

2

This Directive shall apply without prejudice to any requirements pursuant to Directive 96/61/EC.

3

The application of this Directive to the airport of Gibraltar is understood to be without prejudice to the respective legal positions of the Kingdom of Spain and the United Kingdom with regard to the dispute over sovereignty over the territory in which the airport is situated.

Article 3Definitions

For the purposes of this Directive the following definitions shall apply:

(a)

‘allowance’ means an allowance to emit one tonne of carbon dioxide equivalent during a specified period, which shall be valid only for the purposes of meeting the requirements of this Directive and shall be transferable in accordance with the provisions of this Directive;

(b)

emissions means the release of greenhouse gases into the atmosphere from sources in an installation or the release from an aircraft performing an aviation activity listed in Annex I of the gases specified in respect of that activity;

(c)

greenhouse gases means the gases listed in Annex II and other gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and re-emit infrared radiation;

(d)

‘greenhouse gas emissions permit’ means the permit issued in accordance with Articles 5 and 6;

(e)

‘installation’ means a stationary technical unit where one or more activities listed in Annex I are carried out and any other directly associated activities which have a technical connection with the activities carried out on that site and which could have an effect on emissions and pollution;

(f)

‘operator’ means any person who operates or controls an installation or, where this is provided for in national legislation, to whom decisive economic power over the technical functioning of the installation has been delegated;

(g)

‘person’ means any natural or legal person;

(h)

new entrant means any installation carrying out one or more of the activities listed in Annex I, which has obtained a greenhouse gas emissions permit for the first time within the period starting from three months before the date for submission of the list under Article 11(1), and ending three months before the date for the submission of the subsequent list under that Article;

(i)

‘the public’ means one or more persons and, in accordance with national legislation or practice, associations, organisations or groups of persons;

(j)

‘tonne of carbon dioxide equivalent’ means one metric tonne of carbon dioxide (CO2) or an amount of any other greenhouse gas listed in Annex II with an equivalent global-warming potential;

(k)

Annex I Party means a Party listed in Annex I to the United Nations Framework Convention on Climate Change (UNFCCC) that has ratified the Kyoto Protocol as specified in Article 1(7) of the Kyoto Protocol;

(l)

project activity means a project activity approved by one or more Annex I Parties in accordance with Article 6 or Article 12 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;

(m)

emission reduction unit or ERU means a unit issued pursuant to Article 6 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;

(n)

certified emission reduction or CER means a unit issued pursuant to Article 12 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;

(o)

aircraft operator means the person who operates an aircraft at the time it performs an aviation activity listed in Annex I or, where that person is not known or is not identified by the owner of the aircraft, the owner of the aircraft;

(p)

commercial air transport operator means an operator that, for remuneration, provides scheduled or non-scheduled air transport services to the public for the carriage of passengers, freight or mail;

(q)

administering Member State means the Member State responsible for administering the EU ETS in respect of an aircraft operator in accordance with Article 18a;

(r)

attributed aviation emissions means emissions from all flights falling within the aviation activities listed in Annex I which depart from an aerodrome situated in the territory of a Member State and those which arrive in such an aerodrome from a third country;

(s)

historical aviation emissions means the mean average of the annual emissions in the calendar years 2004, 2005 and 2006 from aircraft performing an aviation activity listed in Annex I;

(t)

combustion means any oxidation of fuels, regardless of the way in which the heat, electrical or mechanical energy produced by this process is used, and any other directly associated activities, including waste gas scrubbing;

(u)

electricity generator means an installation that, on or after 1 January 2005, has produced electricity for sale to third parties, and in which no activity listed in Annex I is carried out other than the combustion of fuels.

CHAPTER IIAVIATION
Article 3aScope

The provisions of this Chapter shall apply to the allocation and issue of allowances in respect of aviation activities listed in Annex I.

Article 3bAviation activities

By 2 August 2009, the Commission shall, in accordance with the examination procedure referred to in Article 22a(2), develop guidelines on the detailed interpretation of the aviation activities listed in Annex I.

Article 3cTotal quantity of allowances for aviation1

For the period from 1 January 2012 to 31 December 2012, the total quantity of allowances to be allocated to aircraft operators shall be equivalent to 97 % of the historical aviation emissions.

2

For the period referred to in Article 13 beginning on 1 January 2013, and, in the absence of any amendments following the review referred to in Article 30(4), for each subsequent period, the total quantity of allowances to be allocated to aircraft operators shall be equivalent to 95 % of the historical aviation emissions multiplied by the number of years in the period.

This percentage may be reviewed as part of the general review of this Directive.

3

The Commission shall review the total quantity of allowances to be allocated to aircraft operators in accordance with Article 30(4).

3a

Any allocation of allowances for aviation activities to and from aerodromes located in countries outside the European Economic Area (EEA) after 31 December 2023 shall be subject to the review referred to in Article 28b.

4

By 2 August 2009, the Commission shall decide on the historical aviation emissions, based on best available data, including estimates based on actual traffic information. That decision shall be considered within the Committee referred to in Article 23(1).

Article 3dMethod of allocation of allowances for aviation through auctioning1

In the period referred to in Article 3c(1), 15 % of allowances shall be auctioned.

2

From 1 January 2013, 15 % of allowances shall be auctioned. The Commission shall undertake a study on the ability of the aviation sector to pass on the cost of CO2 to its customers, in relation to the EU ETS and to the global market-based measure developed by the International Civil Aviation Organization (ICAO). The study shall assess the ability of the aviation sector to pass on the cost of required emission units, comparing this to industries and to the power sector, with the intention of making a proposal to increase the percentage of auctioning pursuant to the review referred to in Article 28b(2), taking into account the analysis of costs passed on and considering alignment with other sectors and the competitiveness between different modes of transport.

3

The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the detailed arrangements for the auctioning by Member States of aviation allowances in accordance with paragraphs 1 and 2 of this Article or with Article 3f(8). The number of allowances to be auctioned in each period by each Member State shall be proportionate to its share of the total attributed aviation emissions for all Member States for the reference year reported pursuant to Article 14(3) and verified pursuant to Article 15. For the period referred to in Article 3c(1), the reference year shall be 2010, and for each subsequent period referred to in Article 3c, the reference year shall be the calendar year ending 24 months before the start of the period to which the auction relates. The delegated acts shall ensure that the principles set out in the first subparagraph of Article 10(4) are respected.

4

All revenues generated from the auctioning of allowances should be used to tackle climate change in the Union and third countries, inter alia, to reduce greenhouse gas emissions, to adapt to the impacts of climate change in the Union and third countries, especially developing countries, to fund research and development for mitigation and adaptation, including in particular in the fields of aeronautics and air transport, to reduce emissions through low-emission transport and to cover the cost of administering the EU ETS. Auctioning revenues should also be used to fund common projects to reduce greenhouse gas emissions from the aviation sector, such as the Single European Sky ATM Research (SESAR) Joint Undertaking and the Clean Sky Joint Technology Initiatives and any initiatives enabling the widespread use of GNSS for satellite-based navigation and interoperable capabilities within all Member States, in particular projects that improve air navigation infrastructure, the provision of air navigation services and the use of airspace. The proceeds of auctioning may also be used to fund contributions to the Global Energy Efficiency and Renewable Energy Fund, and measures to avoid deforestation. Special consideration shall be given by Member States that use those revenues for co-financing research and innovation to programmes or initiatives under the Ninth Research Framework Programme (FP9). Transparency on the use of revenues generated from the auctioning of allowances under this Directive is essential to meeting Union commitments.

Member States shall inform the Commission of actions taken pursuant to the first subparagraph of this paragraph.

5

Information provided to the Commission pursuant to this Directive does not free Member States from the notification obligation laid down in Article 88(3) of the Treaty.

Article 3eAllocation and issue of allowances to aircraft operators1

For each period referred to in Article 3c, each aircraft operator may apply for an allocation of allowances that are to be allocated free of charge. An application may be made by submitting to the competent authority in the administering Member State verified tonne-kilometre data for the aviation activities listed in Annex I performed by that aircraft operator for the monitoring year. For the purposes of this Article, the monitoring year shall be the calendar year ending 24 months before the start of the period to which it relates in accordance with Annexes IV and V or, in relation to the period referred to in Article 3c(1), 2010. Any application shall be made at least 21 months before the start of the period to which it relates or, in relation to the period referred to in Article 3c(1), by 31 March 2011.

2

At least 18 months before the start of the period to which the application relates or, in relation to the period referred to in Article 3c(1), by 30 June 2011, Member States shall submit applications received under paragraph 1 to the Commission.

3

At least 15 months before the start of each period referred to in Article 3c(2) or, in relation to the period referred to in Article 3c(1), by 30 September 2011, the Commission shall calculate and adopt a decision setting out:

a

the total quantity of allowances to be allocated for that period in accordance with Article 3c;

b

the number of allowances to be auctioned in that period in accordance with Article 3d;

c

the number of allowances in the special reserve for aircraft operators in that period in accordance with Article 3f(1);

d

the number of allowances to be allocated free of charge in that period by subtracting the number of allowances referred to in points (b) and (c) from the total quantity of allowances decided upon under point (a); and

e

the benchmark to be used to allocate allowances free of charge to aircraft operators whose applications were submitted to the Commission in accordance with paragraph 2.

The benchmark referred to in point (e), expressed as allowances per tonne-kilometre, shall be calculated by dividing the number of allowances referred to in point (d) by the sum of the tonne-kilometre data included in applications submitted to the Commission in accordance with paragraph 2.

4

Within three months from the date on which the Commission adopts a decision under paragraph 3, each administering Member State shall calculate and publish:

a

the total allocation of allowances for the period to each aircraft operator whose application it submitted to the Commission in accordance with paragraph 2, calculated by multiplying the tonne-kilometre data included in the application by the benchmark referred to in paragraph 3(e); and

b

the allocation of allowances to each aircraft operator for each year, which shall be determined by dividing its total allocation of allowances for the period calculated under point (a) by the number of years in the period for which that aircraft operator is performing an aviation activity listed in Annex I.

5

By 28 February 2012 and by 28 February of each subsequent year, the competent authority of the administering Member State shall issue to each aircraft operator the number of allowances allocated to that aircraft operator for that year under this Article or Article 3f.

Article 3fSpecial reserve for certain aircraft operators1

In each period referred to in Article 3c(2), 3 % of the total quantity of allowances to be allocated shall be set aside in a special reserve for aircraft operators:

a

who start performing an aviation activity falling within Annex I after the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2); or

b

whose tonne-kilometre data increases by an average of more than 18 % annually between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period;

and whose activity under point (a), or additional activity under point (b), is not in whole or in part a continuation of an aviation activity previously performed by another aircraft operator.

2

An aircraft operator who is eligible under paragraph 1 may apply for a free allocation of allowances from the special reserve by making an application to the competent authority of its administering Member State. Any application shall be made by 30 June in the third year of the period referred to in Article 3c(2) to which it relates.

An allocation to an aircraft operator under paragraph 1(b) shall not exceed 1 000 000 allowances.

3

An application under paragraph 2 shall:

a

include verified tonne-kilometre data in accordance with Annexes IV and V for the aviation activities listed in Annex I performed by the aircraft operator in the second calendar year of the period referred to in Article 3c(2) to which the application relates;

b

provide evidence that the criteria for eligibility under paragraph 1 are fulfilled; and

c

in the case of aircraft operators falling within paragraph 1(b), state:

(i)

the percentage increase in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period;

(ii)

the absolute growth in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period; and

(iii)

the absolute growth in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period which exceeds the percentage specified in paragraph 1(b).

4

No later than six months from the deadline for making an application under paragraph 2, Member States shall submit applications received under that paragraph to the Commission.

5

No later than 12 months from the deadline for making an application under paragraph 2, the Commission shall decide on the benchmark to be used to allocate allowances free of charge to aircraft operators whose applications were submitted to the Commission in accordance with paragraph 4.

Subject to paragraph 6, the benchmark shall be calculated by dividing the number of the allowances in the special reserve by the sum of:

a

the tonne-kilometre data for aircraft operators falling within paragraph 1(a) included in applications submitted to the Commission in accordance with paragraphs 3(a) and 4; and

b

the absolute growth in tonne-kilometres exceeding the percentage specified in paragraph 1(b) for aircraft operators falling within paragraph 1(b) included in applications submitted to the Commission in accordance with paragraphs 3(c)(iii) and 4.

6

The benchmark referred to in paragraph 5 shall not result in an annual allocation per tonne-kilometre greater than the annual allocation per tonne-kilometre to aircraft operators under Article 3e(4).

7

Within three months from the date on which the Commission adopts a decision under paragraph 5, each administering Member State shall calculate and publish:

a

the allocation of allowances from the special reserve to each aircraft operator whose application it submitted to the Commission in accordance with paragraph 4. This allocation shall be calculated by multiplying the benchmark referred to in paragraph 5 by:

(i)

in the case of an aircraft operator falling within paragraph 1(a), the tonne-kilometre data included in the application submitted to the Commission under paragraphs 3(a) and 4;

(ii)

in the case of an aircraft operator falling within paragraph 1(b), the absolute growth in tonne-kilometres exceeding the percentage specified in paragraph 1(b) included in the application submitted to the Commission under paragraphs 3(c)(iii) and 4; and

b

the allocation of allowances to each aircraft operator for each year, which shall be determined by dividing its allocation of allowances under point (a) by the number of full calendar years remaining in the period referred to in Article 3c(2) to which the allocation relates.

8

Any unallocated allowances in the special reserve shall be auctioned by Member States.

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 3gMonitoring and reporting plans

The administering Member State shall ensure that each aircraft operator submits to the competent authority in that Member State a monitoring plan setting out measures to monitor and report emissions and tonne-kilometre data for the purpose of an application under Article 3e and that such plans are approved by the competent authority in accordance with the acts referred to in Article 14.

CHAPTER IIISTATIONARY INSTALLATIONS
Article 3hScope

The provisions of this Chapter shall apply to greenhouse gas emissions permits and the allocation and issue of allowances in respect of activities listed in Annex I other than aviation activities.

Article 4Greenhouse gas emissions permits

Member States shall ensure that, from 1 January 2005, no installation carries out any activity listed in Annex I resulting in emissions specified in relation to that activity unless its operator holds a permit issued by a competent authority in accordance with Articles 5 and 6, or the installation is excluded from the EU ETS pursuant to Article 27. This shall also apply to installations opted in under Article 24.

Article 5Applications for greenhouse gas emissions permits

An application to the competent authority for a greenhouse gas emissions permit shall include a description of:

(a)

the installation and its activities including the technology used;

(b)

the raw and auxiliary materials, the use of which is likely to lead to emissions of gases listed in Annex I;

(c)

the sources of emissions of gases listed in Annex I from the installation; and

(d)

the measures planned to monitor and report emissions in accordance with the acts referred to in Article 14.

The application shall also include a non-technical summary of the details referred to in the first subparagraph.

Article 6Conditions for and contents of the greenhouse gas emissions permit1

The competent authority shall issue a greenhouse gas emissions permit granting authorisation to emit greenhouse gases from all or part of an installation if it is satisfied that the operator is capable of monitoring and reporting emissions.

A greenhouse gas emissions permit may cover one or more installations on the same site operated by the same operator.

. . . . .

2

Greenhouse gas emissions permits shall contain the following:

a

the name and address of the operator;

b

a description of the activities and emissions from the installation;

c

a monitoring plan that fulfils the requirements under the acts referred to in Article 14. Member States may allow operators to update monitoring plans without changing the permit. Operators shall submit any updated monitoring plans to the competent authority for approval;

d

reporting requirements; and

e

an obligation to surrender allowances, other than allowances issued under Chapter II, equal to the total emissions of the installation in each calendar year, as verified in accordance with Article 15, within four months following the end of that year.

Article 7Changes relating to installations

The operator shall inform the competent authority of any planned changes to the nature or functioning of the installation, or any extension or significant reduction of its capacity, which may require updating the greenhouse gas emissions permit. Where appropriate, the competent authority shall update the permit. Where there is a change in the identity of the installation's operator, the competent authority shall update the permit to include the name and address of the new operator.

Article 8Coordination with Directive 2010/75/EU

Member States shall take the necessary measures to ensure that, where installations carry out activities that are included in Annex I to Directive 2010/75/EU of the European Parliament and of the Council, the conditions and procedure for the issue of a greenhouse gas emissions permit are coordinated with those for the issue of a permit provided for in that Directive. The requirements laid down in Articles 5, 6 and 7 of this Directive may be integrated into the procedures provided for in Directive 2010/75/EU.

Article 9Union-wide quantity of allowances

The Union-wide quantity of allowances issued each year starting in 2013 shall decrease in a linear manner beginning from the mid-point of the period from 2008 to 2012. The quantity shall decrease by a linear factor of 1,74 % compared to the average annual total quantity of allowances issued by Member States in accordance with the Commission Decisions on their national allocation plans for the period from 2008 to 2012. The Union-wide quantity of allowances will be increased as a result of Croatia's accession only by the quantity of allowances that Croatia shall auction pursuant to Article 10(1).

Starting in 2021, the linear factor shall be 2,2 %.

Article 9aAdjustment of the Union-wide quantity of allowances1

In respect of installations that were included in the EU ETS during the period from 2008 to 2012 pursuant to Article 24(1), the quantity of allowances to be issued from 1 January 2013 shall be adjusted to reflect the average annual quantity of allowances issued in respect of those installations during the period of their inclusion, adjusted by the linear factor referred to in Article 9.

2

In respect of installations carrying out activities listed in Annex I, which are only included in the EU ETS from 2013 onwards, Member States shall ensure that the operators of such installations submit to the relevant competent authority duly substantiated and independently verified emissions data in order for them to be taken into account for the adjustment of the Union-wide quantity of allowances to be issued.

Any such data shall be submitted, by 30 April 2010, to the relevant competent authority in accordance with the provisions adopted pursuant to Article 14(1).

If the data submitted are duly substantiated, the competent authority shall notify the Commission thereof by 30 June 2010 and the quantity of allowances to be issued, adjusted by the linear factor referred to in Article 9, shall be adjusted accordingly. In the case of installations emitting greenhouse gases other than CO2, the competent authority may notify a lower amount of emissions according to the emission reduction potential of those installations.

3

The Commission shall publish the adjusted quantities referred to in paragraphs 1 and 2 by 30 September 2010.

4

In respect of installations which are excluded from the EU ETS in accordance with Article 27, the Union-wide quantity of allowances to be issued from 1 January 2013 shall be adjusted downwards to reflect the average annual verified emissions of those installations in the period from 2008 to 2010, adjusted by the linear factor referred to in Article 9.

Article 10Auctioning of allowances1

From 2019 onwards, Member States shall auction all allowances that are not allocated free of charge in accordance with Articles 10a and 10c of this Directive and that are not placed in the market stability reserve established by Decision (EU) 2015/1814 of the European Parliament and of the Council (the market stability reserve) or cancelled in accordance with Article 12(4) of this Directive.

From 2021 onwards, and without prejudice to a possible reduction pursuant to Article 10a(5a), the share of allowances to be auctioned shall be 57 %.

2 % of the total quantity of allowances between 2021 and 2030 shall be auctioned to establish a fund to improve energy efficiency and modernise the energy systems of certain Member States as set out in Article 10d (the Modernisation Fund).

The total remaining quantity of allowances to be auctioned by Member States shall be distributed in accordance with paragraph 2.

1a

Where the volume of allowances to be auctioned by Member States in the last year of each period referred to in Article 13 of this Directive exceeds by more than 30 % the expected average auction volume for the first two years of the following period before application of Article 1(5) of Decision (EU) 2015/1814, two thirds of the difference between the volumes shall be deducted from the auction volumes in the last year of the period and added in equal instalments to the volumes to be auctioned by Member States in the first two years of the following period.

2

The total quantity of allowances to be auctioned by each Member State shall be composed as follows:

a

90 % of the total quantity of allowances to be auctioned being distributed amongst Member States in shares that are identical to the share of verified emissions under the EU ETS for 2005 or the average of the period from 2005 to 2007, whichever one is the highest, of the Member State concerned;

b

10 % of the total quantity of allowances to be auctioned being distributed amongst certain Member States for the purposes of solidarity, growth and interconnections within the Union, thereby increasing the amount of allowances that those Member States auction under point (a) by the percentages specified in Annex IIa.

c

2 % of the total quantity of allowances to be auctioned being distributed amongst Member States the greenhouse gas emissions of which were, in 2005, at least 20 % below their emissions in the base year applicable to them under the Kyoto Protocol. The distribution of this percentage amongst the Member States concerned is set out in Annex IIb.

For the purposes of point (a), in respect of Member States which did not participate in the EU ETS in 2005, their share shall be calculated using their verified emissions under the EU ETS in 2007.

If necessary, the percentages referred to in point (b) shall be adapted in a proportional manner to ensure that the distribution is 10 %.

3

Member States shall determine the use of revenues generated from the auctioning of allowances. At least 50 % of the revenues generated from the auctioning of allowances referred to in paragraph 2, including all revenues from the auctioning referred to in paragraph 2, points (b) and (c), or the equivalent in financial value of these revenues, should be used for one or more of the following:

a

to reduce greenhouse gas emissions, including by contributing to the Global Energy Efficiency and Renewable Energy Fund and to the Adaptation Fund as made operational by the Poznan Conference on Climate Change (COP 14 and COP/MOP 4), to adapt to the impacts of climate change and to fund research and development as well as demonstration projects for reducing emissions and for adaptation to climate change, including participation in initiatives within the framework of the European Strategic Energy Technology Plan and the European Technology Platforms;

b

to develop renewable energies to meet the commitment of the Union to renewable energies, as well as to develop other technologies that contribute to the transition to a safe and sustainable low-carbon economy, and to help to meet the commitment of the Union to increase energy efficiency, at the levels agreed in relevant legislative acts;

c

measures to avoid deforestation and increase afforestation and reforestation in developing countries that have ratified the international agreement on climate change, to transfer technologies and to facilitate adaptation to the adverse effects of climate change in these countries;

d

forestry sequestration in the Union;

e

the environmentally safe capture and geological storage of CO2, in particular from solid fossil fuel power stations and a range of industrial sectors and subsectors, including in third countries;

f

to encourage a shift to low-emission and public forms of transport;

g

to finance research and development in energy efficiency and clean technologies in the sectors covered by this Directive;

h

measures intended to improve energy efficiency, district heating systems and insulation, or to provide financial support in order to address social aspects in lower- and middle-income households;

i

to cover administrative expenses of the management of the EU ETS;

j

to finance climate actions in vulnerable third countries, including the adaptation to the impacts of climate change;

k

to promote skill formation and reallocation of labour in order to contribute to a just transition to a low carbon economy, in particular in regions most affected by the transition of jobs, in close coordination with the social partners.

Member States shall be deemed to have fulfilled the provisions of this paragraph if they have in place and implement fiscal or financial support policies, including in particular in developing countries, or domestic regulatory policies, which leverage financial support, established for the purposes set out in the first subparagraph and which have a value equivalent to at least 50 % of the revenues generated from the auctioning of allowances referred to in paragraph 2, including all revenues from the auctioning referred to in paragraph 2, points (b) and (c).

Member States shall inform the Commission as to the use of revenues and the actions taken pursuant to this paragraph in their reports submitted under Decision No 280/2004/EC.

4

The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the timing, administration and other aspects of auctioning, in order to ensure that it is conducted in an open, transparent, harmonised and non-discriminatory manner. To that end, the process shall be predictable, in particular as regards the timing and sequencing of auctions and the estimated volumes of allowances to be made available.

Those delegated acts shall ensure that auctions are designed to ensure that:

a

operators, and in particular any small and medium-sized enterprises covered by the EU ETS, have full, fair and equitable access;

b

all participants have access to the same information at the same time and that participants do not undermine the operation of the auctions;

c

the organisation of, and participation in, the auctions is cost-efficient and undue administrative costs are avoided; and

d

access to allowances is granted to small emitters.

Member States shall report on the proper implementation of the auctioning rules for each auction, in particular with respect to fair and open access, transparency, price formation and technical and operational aspects. These reports shall be submitted within one month of the auction concerned and shall be published on the Commission's website.

5

The Commission shall monitor the functioning of the European carbon market. Each year, it shall submit a report to the European Parliament and to the Council on the functioning of the carbon market and on other relevant climate and energy policies, including the operation of the auctions, liquidity and the volumes traded, and summarising the information provided by Member States on the financial measures referred to in Article 10a(6). If necessary, Member States shall ensure that any relevant information is submitted to the Commission at least two months before the Commission adopts the report.

Article 10aTransitional Union-wide rules for harmonised free allocation1

The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the Union-wide and fully harmonised rules for the allocation of allowances referred to in paragraphs 4, 5, 7 and 19 of this Article.

The measures referred to in the first subparagraph shall, to the extent feasible, determine Union-wide ex-ante benchmarks so as to ensure that allocation takes place in a manner that provides incentives for reductions in greenhouse gas emissions and energy efficient techniques, by taking account of the most efficient techniques, substitutes, alternative production processes, high efficiency cogeneration, efficient energy recovery of waste gases, use of biomass and capture and storage of CO2, where such facilities are available, and shall not provide incentives to increase emissions. No free allocation shall be made in respect of any electricity production, except for cases falling within Article 10c and electricity produced from waste gases.

For each sector and subsector, in principle, the benchmark shall be calculated for products rather than for inputs, in order to maximise greenhouse gas emissions reductions and energy efficiency savings throughout each production process of the sector or the subsector concerned.

In defining the principles for setting ex-ante benchmarks in individual sectors and subsectors, the Commission shall consult the relevant stakeholders, including the sectors and subsectors concerned.

The Commission shall, upon the approval by the Union of an international agreement on climate change leading to mandatory reductions of greenhouse gas emissions comparable to those of the Union, review those measures to provide that free allocation is only to take place where this is fully justified in the light of that agreement.

2

In defining the principles for setting ex-ante benchmarks in individual sectors or subsectors, the starting point shall be the average performance of the 10 % most efficient installations in a sector or subsector in the Union in the years 2007-2008. The Commission shall consult the relevant stakeholders, including the sectors and subsectors concerned.

The acts pursuant to Articles 14 and 15 shall provide for harmonised rules on monitoring, reporting and verification of production-related greenhouse gas emissions with a view to determining the ex-ante benchmarks.

The Commission shall adopt implementing acts for the purpose of determining the revised benchmark values for free allocation. Those acts shall be in accordance with the delegated acts adopted pursuant to paragraph 1 of this Article and shall comply with the following:

a

For the period from 2021 to 2025, the benchmark values shall be determined on the basis of information submitted pursuant to Article 11 for the years 2016 and 2017. On the basis of a comparison of those benchmark values with the benchmark values contained in Commission Decision 2011/278/EU, as adopted on 27 April 2011, the Commission shall determine the annual reduction rate for each benchmark, and shall apply it to the benchmark values applicable in the period from 2013 to 2020 in respect of each year between 2008 and 2023 to determine the benchmark values for the period from 2021 to 2025.

b

Where the annual reduction rate exceeds 1,6 % or is below 0,2 %, the benchmark values for the period from 2021 to 2025 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant, in respect of each year between 2008 and 2023.

c

For the period from 2026 to 2030, the benchmark values shall be determined in the same manner as set out in points (a) and (b) on the basis of information submitted pursuant to Article 11 for the years 2021 and 2022 and on the basis of applying the annual reduction rate in respect of each year between 2008 and 2028.

By way of derogation regarding the benchmark values for aromatics, hydrogen and syngas, these benchmark values shall be adjusted by the same percentage as the refineries benchmarks in order to preserve a level playing field for producers of those products.

The implementing acts referred to in the third subparagraph shall be adopted in accordance with the examination procedure referred to in Article 22a(2).

In order to promote efficient energy recovery from waste gases, for the period referred to in point (b) of the third subparagraph, the benchmark value for hot metal, which predominantly relates to waste gases, shall be updated with an annual reduction rate of 0,2 %.

3

Subject to paragraphs 4 and 8, and notwithstanding Article 10c, no free allocation shall be given to electricity generators, to installations for the capture of CO2, to pipelines for transport of CO2 or to CO2 storage sites.

4

Free allocation shall be given to district heating as well as to high efficiency cogeneration, as defined by Directive 2012/27/EU of the European Parliament and of the Council, for economically justifiable demand, in respect of the production of heating or cooling. In each year subsequent to 2013, the total allocation to such installations in respect of the production of that heat shall be adjusted by the linear factor referred to in Article 9 of this Directive, except for any year in which those allocations are adjusted in a uniform manner pursuant to paragraph 5 of this Article.

5

In order to respect the auctioning share set out in Article 10, for every year in which the sum of free allocations does not reach the maximum amount that respects the auctioning share, the remaining allowances up to that amount shall be used to prevent or limit reduction of free allocations to respect the auctioning share in later years. Where, nonetheless, the maximum amount is reached, free allocations shall be adjusted accordingly. Any such adjustment shall be done in a uniform manner.

5a

By way of derogation from paragraph 5, an additional amount of up to 3 % of the total quantity of allowances shall, to the extent necessary, be used to increase the maximum amount available under paragraph 5.

5b

Where less than 3 % of the total quantity of allowances is needed to increase the maximum amount available under paragraph 5:

a maximum of 50 million allowances shall be used to increase the amount of allowances available to support innovation in accordance with Article 10a(8); and

a maximum of 0,5 % of the total quantity of allowances shall be used to increase the amount of allowances available to modernise the energy systems of certain Member States in accordance with Article 10d.

6

Member States should adopt financial measures in accordance with the second and fourth subparagraphs in favour of sectors or subsectors which are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred from greenhouse gas emission costs passed on in electricity prices, provided that such financial measures are in accordance with State aid rules, and in particular do not cause undue distortions of competition in the internal market. Where the amount available for such financial measures exceeds 25 % of the revenues generated from the auctioning of allowances, the Member State concerned shall set out the reasons for exceeding that amount.

Member States shall also seek to use no more than 25 % of the revenues generated from the auctioning of allowances for the financial measures referred to in the first subparagraph. Within three months of the end of each year, Member States that have such financial measures in place shall make available to the public, in an easily accessible form, the total amount of compensation provided per benefitting sector and subsector. As from 2018, in any year in which a Member State uses more than 25 % of the revenues generated from the auctioning of allowances for such purposes, it shall publish a report setting out the reasons for exceeding that amount. The report shall include relevant information on electricity prices for large industrial consumers benefiting from such financial measures, without prejudice to requirements regarding the protection of confidential information. The report shall also include information on whether due consideration has been given to other measures to sustainably lower indirect carbon costs in the medium to long term.

The Commission shall include in the report provided for in Article 10(5), inter alia, an assessment of the effects of such financial measures on the internal market and, where appropriate, recommend any measures that may be necessary pursuant to that assessment.

Those measures shall be such as to ensure that there is adequate protection against the risk of carbon leakage, based on ex-ante benchmarks for the indirect emissions of CO2 per unit of production. Those ex-ante benchmarks shall be calculated for a given sector or subsector as the product of the electricity consumption per unit of production corresponding to the most efficient available technologies and of the CO2 emissions of the relevant European electricity production mix.

7

Allowances from the maximum amount referred to in paragraph 5 of this Article which were not allocated for free by 2020 shall be set aside for new entrants, together with 200 million allowances placed in the market stability reserve pursuant to Article 1(3) of Decision (EU) 2015/1814. Of the allowances set aside, up to 200 million shall be returned to the market stability reserve at the end of the period from 2021 to 2030 if not allocated for that period.

From 2021, allowances that pursuant to paragraphs 19 and 20 are not allocated to installations shall be added to the amount of allowances set aside in accordance with the first sentence of the first subparagraph of this paragraph.

Allocations shall be adjusted by the linear factor referred to in Article 9.

No free allocation shall be made in respect of any electricity production by new entrants.

. . . . .

. . . . .

8

325 million allowances from the quantity which could otherwise be allocated for free pursuant to this Article, and 75 million allowances from the quantity which could otherwise be auctioned pursuant to Article 10, shall be made available to support innovation in low-carbon technologies and processes in sectors listed in Annex I, including environmentally safe carbon capture and utilisation (CCU) that contributes substantially to mitigating climate change, as well as products substituting carbon intensive ones produced in sectors listed in Annex I, and to help stimulate the construction and operation of projects that aim at the environmentally safe capture and geological storage (CCS) of CO2, as well as of innovative renewable energy and energy storage technologies; in geographically balanced locations within the territory of the Union (the innovation fund). Projects in all Member States, including small-scale projects, shall be eligible.

In addition, 50 million unallocated allowances from the market stability reserve shall supplement any remaining revenues from the 300 million allowances available in the period from 2013 to 2020 under Commission Decision 2010/670/EU, and shall be used in a timely manner for innovation support as referred to in the first subparagraph.

Projects shall be selected on the basis of objective and transparent criteria, taking into account, where relevant, the extent to which projects contribute to achieving emission reductions well below the benchmarks referred to in paragraph 2. Projects shall have the potential for widespread application or to significantly lower the costs of transitioning towards a low-carbon economy in the sectors concerned. Projects involving CCU shall deliver a net reduction in emissions and ensure avoidance or permanent storage of CO2. Technologies receiving support shall not yet be commercially available but shall represent breakthrough solutions or be sufficiently mature to be ready for demonstration at pre-commercial scale. Up to 60 % of the relevant costs of projects may be supported, out of which up to 40 % need not be dependent on verified avoidance of greenhouse gas emissions, provided that pre-determined milestones, taking into account the technology deployed, are attained.

The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning rules on the operation of the innovation fund, including the selection procedure and criteria.

Allowances shall be set aside for the projects that meet the criteria referred to in the third subparagraph. Support for these projects shall be given via Member States and shall be complementary to substantial co-financing by the operator of the installation. They could also be co-financed by the Member State concerned, as well as by other instruments. No project shall receive support via the mechanism under this paragraph that exceeds 15 % of the total number of allowances available for this purpose. These allowances shall be taken into account under paragraph 7.

9

Greece, which had a gross domestic product (GDP) per capita at market prices below 60 % of the Union average in 2014, may claim, prior to the application of paragraph 7 of this Article, up to 25 million allowances from the maximum amount referred to in paragraph 5 of this Article which are not allocated for free by 31 December 2020, for the co-financing of up to 60 % of the decarbonisation of the electricity supply of islands within its territory. Article 10d(3) shall apply mutatis mutandis to such allowances. Allowances may be claimed where, due to restricted access to the international debt markets, a project aiming at the decarbonisation of the electricity supply of Greece's islands could otherwise not be realised and where the European Investment Bank (EIB) confirms the financial viability and socio-economic benefits of the project.

10

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11

Subject to Article 10b, the amount of allowances allocated free of charge under paragraphs 4 to 7 of this Article in 2013 shall be 80 % of the quantity determined in accordance with the measures referred to in paragraph 1. Thereafter the free allocation shall decrease each year by equal amounts resulting in 30 % free allocation in 2020 , with a view to reaching no free allocation in 2027.

12

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13

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14

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15

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16

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17

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18

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19

No free allocation shall be given to an installation that has ceased its operations, unless the operator demonstrates to the competent authority that this installation will resume production within a specified and reasonable time. Installations for which the greenhouse gas emissions permit has expired or has been withdrawn and installations for which the operation or resumption of operation is technically impossible shall be considered to have ceased operations.

20

The level of free allocations given to installations whose operations have increased or decreased, as assessed on the basis of a rolling average of two years, by more than 15 % compared to the level initially used to determine the free allocation for the relevant period referred to in Article 11(1) shall, as appropriate, be adjusted. Such adjustments shall be carried out with allowances from, or by adding allowances to, the amount of allowances set aside in accordance with paragraph 7 of this Article.

21

In order to ensure the effective, non-discriminatory and uniform application of the adjustments and threshold referred to in paragraph 20 of this Article, to avoid any undue administrative burden, and to prevent manipulation or abuse of the adjustments to the allocation, the Commission may adopt implementing acts which define further arrangements for the adjustments. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).

Article 10bTransitional measures to support certain energy intensive industries in the event of carbon leakage1

Sectors and subsectors in relation to which the product resulting from multiplying their intensity of trade with third countries, defined as the ratio between the total value of exports to third countries plus the value of imports from third countries and the total market size for the European Economic Area (annual turnover plus total imports from third countries), by their emission intensity, measured in kgCO2, divided by their gross value added (in euros), exceeds 0,2, shall be deemed to be at risk of carbon leakage. Such sectors and subsectors shall be allocated allowances free of charge for the period until 2030 at 100 % of the quantity determined pursuant to Article 10a.

2

Sectors and subsectors in relation to which the product resulting from multiplying their intensity of trade with third countries by their emission intensity exceeds 0,15 may be included in the group referred to in paragraph 1, using data for the years from 2014 to 2016, on the basis of a qualitative assessment and of the following criteria:

a

the extent to which it is possible for individual installations in the sector or subsector concerned to reduce emission levels or electricity consumption;

b

current and projected market characteristics, including, where relevant, any common reference price;

c

profit margins as a potential indicator of long-run investment or relocation decisions, taking into account changes in costs of production relating to emission reductions.

3

Sectors and subsectors that do not exceed the threshold referred to in paragraph 1, but have an emission intensity measured in kgCO2, divided by their gross value added (in euros), which exceeds 1,5, shall also be assessed at a 4-digit level (NACE-4 code). The Commission shall make the results of that assessment public.

Within three months of the publication referred to in the first subparagraph, the sectors and subsectors referred to in that subparagraph may apply to the Commission for either a qualitative assessment of their carbon leakage exposure at a 4-digit level (NACE-4 code) or an assessment on the basis of the classification of goods used for statistics on industrial production in the Union at an 8-digit level (Prodcom). To that end, sectors and subsectors shall submit duly substantiated, complete and independently verified data to enable the Commission to carry out the assessment together with the application.

Where a sector or subsector chooses to be assessed at a 4-digit level (NACE-4 code), it may be included in the group referred to in paragraph 1 on the basis of the criteria referred to in points (a), (b) and (c) of paragraph 2. Where a sector or subsector chooses to be assessed at an 8-digit level (Prodcom), it shall be included in the group referred to in paragraph 1 provided that, at that level, the threshold of 0,2 referred to in paragraph 1 is exceeded.

Sectors and subsectors for which free allocation is calculated on the basis of the benchmark values referred to in the fourth subparagraph of Article 10a(2) may also request to be assessed in accordance with the third subparagraph of this paragraph.

By way of derogation from paragraphs 1 and 2, a Member State may request, by 30 June 2018, that a sector or subsector listed in the Annex to Commission Decision 2014/746/EU in respect of classifications at a 6-digit or an 8-digit level (Prodcom) be considered to be included in the group referred to in paragraph 1. Any such request shall only be considered where the requesting Member State establishes that the application of that derogation is justified on the basis of duly substantiated, complete, verified and audited data for the five most recent years provided by the sector or subsector concerned, and includes all relevant information with its request. On the basis of those data, the sector or subsector concerned shall be included in respect of those classifications where, within a heterogeneous 4-digit level (NACE-4 code), it is shown that it has a substantially higher trade and emission intensity at a 6-digit or an 8-digit level (Prodcom), exceeding the threshold set out in paragraph 1.

4

Other sectors and subsectors are considered to be able to pass on more of the costs of allowances in product prices, and shall be allocated allowances free of charge at 30 % of the quantity determined pursuant to Article 10a. Unless otherwise decided in the review pursuant to Article 30, free allocations to other sectors and subsectors, except district heating, shall decrease by equal amounts after 2026 so as to reach a level of no free allocation in 2030.

5

The Commission is empowered to adopt, by 31 December 2019, delegated acts in accordance with Article 23 to supplement this Directive concerning the determination of sectors and subsectors deemed at risk of carbon leakage, as referred to in paragraphs 1, 2 and 3 of this Article, for activities at a 4-digit level (NACE-4 code) as far as paragraph 1 of this Article is concerned, based on data for the three most recent calendar years available.

Article 10cOption for transitional free allocation for the modernisation of the energy sector1

By way of derogation from Article 10a(1) to (5), Member States which had in 2013 a GDP per capita at market prices (in euros) below 60 % of the Union average may give a transitional free allocation to installations for electricity generation for the modernisation, diversification and sustainable transformation of the energy sector. The investments supported shall be consistent with the transition to a safe and sustainable low-carbon economy, the objectives of the Union's 2030 climate and energy policy framework, and reaching the long-term objectives expressed in the Paris Agreement. The derogation provided for in this paragraph shall end on 31 December 2030.

2

The Member State concerned shall organise a competitive bidding process, to take place in one or more rounds between 2021 and 2030, for projects involving a total amount of investment exceeding EUR 12,5 million, in order to select the investments to be financed with free allocation. That competitive bidding process shall:

a

comply with the principles of transparency, non-discrimination, equal treatment and sound financial management;

b

ensure that only projects which contribute to the diversification of their energy mix and sources of supply, the necessary restructuring, environmental upgrading and retrofitting of the infrastructure, clean technologies, such as renewable energy technologies, or modernisation of the energy production sector, such as efficient and sustainable district heating, and of the transmission and distribution sector, are eligible to bid;

c

define clear, objective, transparent and non-discriminatory selection criteria for the ranking of projects, so as to ensure that only projects are selected which:

(i)

on the basis of a cost-benefit analysis, ensure a net positive gain in terms of emission reduction and realise a pre-determined significant level of CO2 reductions taking into account the size of the project;

(ii)

are additional, clearly respond to replacement and modernisation needs and do not supply a market-driven increase in energy demand;

(iii)

offer the best value for money; and

(iv)

do not contribute to or improve the financial viability of highly emission-intensive electricity generation or increase dependency on emission-intensive fossil fuels.

By way of derogation from Article 10(1) and without prejudice to the last sentence of paragraph 1 of this Article, in the event that an investment selected through the competitive bidding process is cancelled or the intended performance is not reached, the earmarked allowances may be used through a single additional round of the competitive bidding process at the earliest one year thereafter to finance other investments.

By 30 June 2019, any Member State intending to make use of optional transitional free allocation for the modernisation of the energy sector shall publish a detailed national framework setting out the competitive bidding process, including the planned number of rounds referred to in the first subparagraph, and the selection criteria, for public comment.

Where investments with a value of less than EUR 12,5 million are to be supported with free allocation and are not selected through the competitive bidding process referred to in this paragraph, the Member State shall select projects based on objective and transparent criteria. The results of this selection process shall be published for public comment. On this basis, the Member State concerned shall, by 30 June 2019, establish, publish and submit to the Commission a list of investments. Where more than one investment is carried out within the same installation, they shall be assessed as a whole to establish whether or not the value threshold of EUR 12,5 million is exceeded, unless those investments are, independently, technically or financially viable.

3

The value of the intended investments shall at least equal the market value of the free allocation, while taking into account the need to limit directly linked price increases. The market value shall be the average of the price of allowances on the common auction platform in the preceding calendar year. Up to 70 % of the relevant costs of an investment may be supported using the free allocation, provided that the remaining costs are financed by private legal entities.

4

Transitional free allocations shall be deducted from the quantity of allowances that the Member State would otherwise auction. The total free allocation shall be no more than 40 % of the allowances which the Member State concerned will receive, pursuant to Article 10(2)(a), in the period from 2021 to 2030, spread out in equal annual volumes over that period.

5

Where a Member State, pursuant to Article 10d(4), uses allowances distributed for the purposes of solidarity, growth and interconnections within the Union in accordance with Article 10(2)(b), that Member State may, by way of derogation from paragraph 4 of this Article, use for transitional free allocation a total quantity of up to 60 % of the allowances received in the period from 2021 to 2030 pursuant to Article 10(2)(a), using a corresponding amount of the allowances distributed in accordance with Article 10(2)(b).

Any allowances not allocated under this Article by 2020 may be allocated over the period from 2021 to 2030 to investments selected through the competitive bidding process referred to in paragraph 2, unless the Member State concerned informs the Commission by 30 September 2019 of its intention not to allocate some or all of those allowances over the period from 2021 to 2030, and of the amount of allowances to be auctioned instead in 2020. Where such allowances are allocated over the period from 2021 to 2030, a corresponding amount of allowances shall be taken into account for the application of the 60 % limit set out in the first subparagraph of this paragraph.

6

Allocations to operators shall be made upon demonstration that an investment selected in accordance with the rules of the competitive bidding process has been carried out. Where an investment leads to additional electricity generation capacity, the operator concerned shall also demonstrate that a corresponding amount of electricity-generation capacity with higher emission intensity has been decommissioned by it or another associated operator by the start of operation of the additional capacity.

7

Member States shall require benefiting electricity generators and network operators to report, by 28 February of each year, on the implementation of their selected investments, including the balance of free allocation and investment expenditure incurred and the types of investments supported. Member States shall report on this to the Commission, and the Commission shall make such reports public.

Article 10dModernisation Fund1

A fund to support investments proposed by the beneficiary Member States, including the financing of small-scale investment projects, to modernise energy systems and improve energy efficiency, in Member States with a GDP per capita at market prices below 60 % of the Union average in 2013 (the Modernisation Fund), shall be established for the period from 2021 to 2030. The Modernisation Fund shall be financed through the auctioning of allowances as set out in Article 10.

The investments supported shall be consistent with the aims of this Directive, as well as the objectives of the Union's 2030 climate and energy policy framework and the long-term objectives as expressed in the Paris Agreement. No support from the Modernisation Fund shall be provided to energy generation facilities that use solid fossil fuels, other than efficient and sustainable district heating in Member States with a GDP per capita at market prices below 30 % of the Union average in 2013, provided that an amount of allowances of at least an equivalent value is used for investments under Article 10c that do not involve solid fossil fuels.

2

At least 70 % of the financial resources from the Modernisation Fund shall be used to support investments in the generation and use of electricity from renewable sources, the improvement of energy efficiency, except energy efficiency relating to energy generation using solid fossil fuels, energy storage and the modernisation of energy networks, including district heating pipelines, grids for electricity transmission and the increase of interconnections between Member States, as well as to support a just transition in carbon-dependent regions in the beneficiary Member States, so as to support the redeployment, re-skilling and up-skilling of workers, education, job-seeking initiatives and start-ups, in dialogue with the social partners. Investments in energy efficiency in transport, buildings, agriculture and waste shall also be eligible.

3

The Modernisation Fund shall operate under the responsibility of the beneficiary Member States. The EIB shall ensure that the allowances are auctioned in accordance with the principles and modalities laid down in Article 10(4), and shall be responsible for managing the revenues. The EIB shall pass on the revenues to the Member States upon a disbursement decision from the Commission, where this disbursement for investments is in line with paragraph 2 of this Article or, where the investments do not fall into the areas listed in paragraph 2 of this Article, is in line with the recommendations of the investment committee. The Commission shall adopt its decision in a timely manner. The revenues shall be distributed amongst the Member States and according to the shares set out in Annex IIb, in accordance with paragraphs 6 to 12 of this Article.

4

Any Member State concerned may use the total free allocation granted pursuant to Article 10c(4), or part of that allocation, and the amount of allowances distributed for the purposes of solidarity, growth and interconnections within the Union in accordance with Article 10(2)(b), or part of that amount, in accordance with Article 10d, to support investments within the framework of the Modernisation Fund, thereby increasing the resources distributed to that Member State. By 30 September 2019, the Member State concerned shall notify the Commission of the respective amounts of allowances to be used under Article 10(2)(b), Article 10c and Article 10d.

5

An investment committee for the Modernisation Fund is hereby established. The investment committee shall be composed of a representative from each beneficiary Member State, the Commission and the EIB, and three representatives elected by the other Member States for a period of five years. It shall be chaired by the representative of the Commission. One representative of each Member State that is not a member of the investment committee may attend meetings of the committee as an observer.

The investment committee shall operate in a transparent manner. The composition of the investment committee and the curricula vitae and declarations of interests of its members shall be made available to the public and, where necessary, updated.

6

Before a beneficiary Member State decides to finance an investment from its share in the Modernisation Fund, it shall present the investment project to the investment committee and to the EIB. Where the EIB confirms that an investment falls into the areas listed in paragraph 2, the Member State may proceed to finance the investment project from its share.

Where an investment in the modernisation of energy systems, which is proposed to be financed from the Modernisation Fund, does not fall into the areas listed in paragraph 2, the investment committee shall assess the technical and financial viability of that investment, including the emission reductions it achieves, and issue a recommendation on financing the investment from the Modernisation Fund. The investment committee shall ensure that any investment relating to district heating achieves a substantial improvement in energy efficiency and emission reductions. That recommendation may include suggestions regarding appropriate financing instruments. Up to 70 % of the relevant costs of an investment which does not fall into the areas listed in paragraph 2 may be supported with resources from the Modernisation Fund provided that the remaining costs are financed by private legal entities.

7

The investment committee shall strive to adopt its recommendations by consensus. If the investment committee is not able to decide by consensus within a deadline set by the chairman, it shall take a decision by simple majority.

If the representative of the EIB does not endorse financing an investment, a recommendation shall only be adopted if a majority of two-thirds of all members vote in favour. The representative of the Member State in which the investment is to take place and the representative of the EIB shall not be entitled to cast a vote in this case. This subparagraph shall not apply to small-scale projects funded through loans provided by a national promotional bank or through grants contributing to the implementation of a national programme serving specific objectives in line with the objectives of the Modernisation Fund, provided that not more than 10 % of the Member States' share set out in Annex IIb is used under the programme.

8

Any acts or recommendations by the EIB or the investment committee made pursuant to paragraphs 6 and 7 shall be made in a timely manner and state the reasons on which they are based. Such acts and recommendations shall be made public.

9

The beneficiary Member States shall be responsible for following up on the implementation with respect to selected projects.

10

The beneficiary Member States shall report annually to the Commission on investments financed by the Modernisation Fund. The report shall be made public and include:

a

information on the investments financed per beneficiary Member State;

b

an assessment of the added value, in terms of energy efficiency or modernisation of the energy system, achieved through the investment.

11

The investment committee shall report annually to the Commission on experience with the evaluation of investments. By 31 December 2024, taking into consideration the findings of the investment committee, the Commission shall review the areas for projects referred to in paragraph 2 and the basis on which the investment committee bases its recommendations.

12

The Commission shall adopt implementing acts concerning detailed rules on the operation of the Modernisation Fund. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).

Article 11National implementation measures1

Each Member State shall publish and submit to the Commission, by 30 September 2011, the list of installations covered by this Directive in its territory and any free allocation to each installation in its territory calculated in accordance with the rules referred to in Article 10a(1) and Article 10c.

A list of installations covered by this Directive for the five years beginning on 1 January 2021 shall be submitted by 30 September 2019, and lists for each subsequent period of five years shall be submitted every five years thereafter. Each list shall include information on production activity, transfers of heat and gases, electricity production and emissions at sub-installation level over the five calendar years preceding its submission. Free allocations shall only be given to installations where such information is provided.

2

By 28 February of each year, the competent authorities shall issue the quantity of allowances that are to be allocated for that year, calculated in accordance with Articles 10, 10a and 10c.

3

Member States may not issue allowances free of charge under paragraph 2 to installations whose inscription in the list referred to in paragraph 1 has been rejected by the Commission.

CHAPTER IVPROVISIONS APPLYING TO AVIATION AND STATIONARY INSTALLATIONS
Article 11aUse of CERs and ERUs from project activities in the EU ETS before the entry into force of an international agreement on climate change1

Without prejudice to the application of Article 28(3) and (4), paragraphs 2 to 7 of this Article shall apply.

2

To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8, operators may request the competent authority to issue allowances to them valid from 2013 onwards in exchange for CERs and ERUs issued in respect of emission reductions up until 2012 from project types which were eligible for use in the EU ETS during the period from 2008 to 2012.

Until 31 March 2015, the competent authority shall make such an exchange on request.

3

To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8, competent authorities shall allow operators to exchange CERs and ERUs from projects that were registered before 2013 issued in respect of emission reductions from 2013 onwards for allowances valid from 2013 onwards.

The first subparagraph shall apply to CERs and ERUs for all project types which were eligible for use in the EU ETS during the period from 2008 to 2012.

4

To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8, competent authorities shall allow operators to exchange CERs issued in respect of emission reductions from 2013 onwards for allowances from new projects started from 2013 onwards in LDCs.

The first subparagraph shall apply to CERs for all project types which were eligible for use in the EU ETS during the period from 2008 to 2012, until those countries have ratified a relevant agreement with the Union or until 2020, whichever is the earlier.

5

To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8 and in the event that the negotiations on an international agreement on climate change are not concluded by 31 December 2009, credits from projects or other emission reducing activities may be used in the EU ETS in accordance with agreements concluded with third countries, specifying levels of use. In accordance with such agreements, operators shall be able to use credits from project activities in those third countries to comply with their obligations under the EU ETS.

6

Any agreements referred to in paragraph 5 shall provide for the use of credits in the EU ETS from project types which were eligible for use in the EU ETS during the period from 2008 to 2012, including renewable energy or energy efficiency technologies which promote technological transfer and sustainable development. Any such agreement may also provide for the use of credits from projects where the baseline used is below the level of free allocation under the measures referred to in Article 10a or below the levels required by Union legislation.

7

Once an international agreement on climate change has been reached, only credits from projects from third countries which have ratified that agreement shall be accepted in the EU ETS from 1 January 2013.

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 11bProject activities1

Member States shall take all necessary measures to ensure that baselines for project activities, as defined by subsequent decisions adopted under the UNFCCC or the Kyoto Protocol, undertaken in countries having signed a Treaty of Accession with the Union fully comply with the acquis communautaire, including the temporary derogations set out in that Treaty of Accession.

The Union and its Member States shall only authorise project activities where all project participants have headquarters either in a country that has concluded the international agreement relating to such projects or in a country or sub-federal or regional entity which is linked to the EU ETS pursuant to Article 25.

2

Except as provided for in paragraphs 3 and 4, Member States hosting project activities shall ensure that no ERUs or CERs are issued for reductions or limitations of greenhouse gas emissions from activities falling within the scope of this Directive.

3

Until 31 December 2012, for JI and CDM project activities which reduce or limit directly the emissions of an installation falling within the scope of this Directive, ERUs and CERs may be issued only if an equal number of allowances is cancelled by the operator of that installation.

4

Until 31 December 2012, for JI and CDM project activities which reduce or limit indirectly the emission level of installations falling within the scope of this Directive, ERUs and CERs may be issued only if an equal number of allowances is cancelled from the national registry of the Member State of the ERUs’ or CERs’ origin.

5

A Member State that authorises private or public entities to participate in project activities shall remain responsible for the fulfilment of its obligations under the UNFCCC and the Kyoto Protocol and shall ensure that such participation is consistent with the relevant guidelines, modalities and procedures adopted pursuant to the UNFCCC or the Kyoto Protocol.

6

In the case of hydroelectric power production project activities with a generating capacity exceeding 20 MW, Member States shall, when approving such project activities, ensure that relevant international criteria and guidelines, including those contained in the World Commission on Dams November 2000 Report Dams and Development — A New Framework for Decision-Making, will be respected during the development of such project activities.

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 12Transfer, surrender and cancellation of allowances1

Member States shall ensure that allowances can be transferred between:

a

persons within the Union;

b

persons within the Union and persons in third countries, where such allowances are recognised in accordance with the procedure referred to in Article 25 without restrictions other than those contained in, or adopted pursuant to, this Directive.

1a

The Commission shall, by 31 December 2010, examine whether the market for emissions allowances is sufficiently protected from insider dealing or market manipulation and, if appropriate, shall bring forward proposals to ensure such protection. The relevant provisions of Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) may be used with any appropriate adjustments needed to apply them to trade in commodities.

2

Member States shall ensure that allowances issued by a competent authority of another Member State are recognised for the purpose of meeting an aircraft operator’s obligations under paragraph 2a or of meeting an operator's obligations under paragraph 3.

2a

Administering Member States shall ensure that, by 30 April each year, each aircraft operator surrenders a number of allowances equal to the total emissions during the preceding calendar year from aviation activities listed in Annex I for which it is the aircraft operator, as verified in accordance with Article 15. Member States shall ensure that allowances surrendered in accordance with this paragraph are subsequently cancelled.

3

For the period until 31 December 2020, Member States shall ensure that, by 30 April each year, the operator of each installation surrenders a number of allowances, other than allowances issued under Chapter II, that is equal to the total emissions from that installation during the preceding calendar year as verified in accordance with Article 15, and that those allowances are subsequently cancelled. For the period starting from 1 January 2021, Member States shall ensure that, by 30 April each year, the operator of each installation surrenders a number of allowances, that is equal to the total emissions from that installation during the preceding calendar year as verified in accordance with Article 15, and that those allowances are subsequently cancelled, subject to the review referred to in Article 28b.

3-a

Where necessary, and for as long as is necessary, in order to protect the environmental integrity of the EU ETS, aircraft operators and other operators in the EU ETS shall be prohibited from using allowances that are issued by a Member State in respect of which there are obligations lapsing for aircraft operators and other operators. The legal act referred to in Article 19 shall include the measures necessary in the cases referred to in this paragraph.

3a

An obligation to surrender allowances shall not arise in respect of emissions verified as captured and transported for permanent storage to a facility for which a permit is in force in accordance with Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide.

4

Member States shall take the necessary steps to ensure that allowances will be cancelled at any time at the request of the person holding them. In the event of closure of electricity generation capacity in their territory due to additional national measures, Member States may cancel allowances from the total quantity of allowances to be auctioned by them referred to in Article 10(2) up to an amount corresponding to the average verified emissions of the installation concerned over a period of five years preceding the closure. The Member State concerned shall inform the Commission of such intended cancellation in accordance with the delegated acts adopted pursuant to Article 10(4).

5

Paragraphs 1 and 2 apply without prejudice to Article 10c.

Article 13Validity of allowances

Allowances issued from 1 January 2013 onwards shall be valid indefinitely. Allowances issued from 1 January 2021 onwards shall include an indication showing in which ten-year period beginning from 1 January 2021 they were issued, and be valid for emissions from the first year of that period onwards.

Article 14Monitoring and reporting of emissions1

The Commission shall adopt implementing acts concerning the detailed arrangements for the monitoring and reporting of emissions and, where relevant, activity data, from the activities listed in Annex I, for the monitoring and reporting of tonne-kilometre data for the purpose of an application under Article 3e or 3f, which shall be based on the principles for monitoring and reporting set out in Annex IV and the requirements set out in paragraph 2 of this Article. Those implementing acts shall also specify the global warming potential of each greenhouse gas in the requirements for monitoring and reporting emissions for that gas.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).

2

The acts referred to in paragraph 1 shall take into account the most accurate and up-to-date scientific evidence available, in particular from the IPCC, and may also specify requirements for operators to report on emissions associated with the production of goods produced by energy intensive industries which may be subject to international competition. These acts may also specify requirements for this information to be verified independently.

Those requirements may include reporting on levels of emissions from electricity generation covered by the EU ETS associated with the production of such goods.

3

Member States shall ensure that each operator of an installation or an aircraft operator monitors and reports the emissions from that installation during each calendar year, or, from 1 January 2010, the aircraft which it operates, to the competent authority after the end of that year in accordance with the acts referred to in paragraph 1.

4

The acts referred to in paragraph 1 may include requirements on the use of automated systems and data exchange formats to harmonise communication on the monitoring plan, the annual emission report and the verification activities between the operator, the verifier and competent authorities.

Article 15Verification and accreditation

Member States shall ensure that the reports submitted by operators and aircraft operators pursuant to Article 14(3) are verified in accordance with the criteria set out in Annex V and any detailed provisions adopted by the Commission in accordance with this Article, and that the competent authority is informed thereof.

Member States shall ensure that an operator or aircraft operator whose report has not been verified as satisfactory in accordance with the criteria set out in Annex V and any detailed provisions adopted by the Commission in accordance with this Article by 31 March each year for emissions during the preceding year cannot make further transfers of allowances until a report from that operator or aircraft operator has been verified as satisfactory.

The Commission shall adopt implementing acts concerning the verification of emission reports based on the principles set out in Annex V and for the accreditation and supervision of verifiers. The Commission may also adopt implementing acts for the verification of reports submitted by aircraft operators pursuant to Article 14(3) and applications under Articles 3e and 3f, including the verification procedures to be used by verifiers. It shall specify conditions for the accreditation and withdrawal of accreditation, for mutual recognition and peer evaluation of accreditation bodies, as appropriate.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).

Article 15aDisclosure of information and professional secrecy

Member States and the Commission shall ensure that all decisions and reports relating to the quantity and allocation of allowances and to the monitoring, reporting and verification of emissions are immediately disclosed in an orderly manner ensuring non-discriminatory access.

Information covered by professional secrecy may not be disclosed to any other person or authority except by virtue of the applicable laws, regulations or administrative provisions.

Article 16Penalties1

Member States shall lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that such rules are implemented. The penalties provided for must be effective, proportionate and dissuasive. Member States shall notify these provisions to the Commission by 31 December 2003 at the latest, and shall notify it without delay of any subsequent amendment affecting them.

2

Member States shall ensure publication of the names of operators and aircraft operators who are in breach of requirements to surrender sufficient allowances under this Directive.

3

Member States shall ensure that any operator or aircraft operator who does not surrender sufficient allowances by 30 April of each year to cover its emissions during the preceding year shall be held liable for the payment of an excess emissions penalty. The excess emissions penalty shall be EUR 100 for each tonne of carbon dioxide equivalent emitted for which the operator or aircraft operator has not surrendered allowances. Payment of the excess emissions penalty shall not release the operator or aircraft operator from the obligation to surrender an amount of allowances equal to those excess emissions when surrendering allowances in relation to the following calendar year.

4

The excess emissions penalty relating to allowances issued from 1 January 2013 onwards shall increase in accordance with the European index of consumer prices.

5

In the event that an aircraft operator fails to comply with the requirements of this Directive and where other enforcement measures have failed to ensure compliance, its administering Member State may request the Commission to decide on the imposition of an operating ban on the aircraft operator concerned.

6

Any request by an administering Member State under paragraph 5 shall include:

a

evidence that the aircraft operator has not complied with its obligations under this Directive;

b

details of the enforcement action which has been taken by that Member State;

c

a justification for the imposition of an operating ban at Union level; and

d

a recommendation for the scope of an operating ban at Union level and any conditions that should be applied.

7

When requests such as those referred to in paragraph 5 are addressed to the Commission, the Commission shall inform the other Member States through their representatives on the Committee referred to in Article 23(1) in accordance with the Committee’s Rules of Procedure.

8

The adoption of a decision following a request pursuant to paragraph 5 shall be preceded, when appropriate and practicable, by consultations with the authorities responsible for regulatory oversight of the aircraft operator concerned. Whenever possible, consultations shall be held jointly by the Commission and the Member States.

9

When the Commission is considering whether to adopt a decision following a request pursuant to paragraph 5, it shall disclose to the aircraft operator concerned the essential facts and considerations which form the basis for such decision. The aircraft operator concerned shall be given an opportunity to submit written comments to the Commission within 10 working days from the date of disclosure.

10

At the request of a Member State, the Commission may, in accordance with the examination procedure referred to in Article 22a(2), adopt a decision to impose an operating ban on the aircraft operator concerned.

11

Each Member State shall enforce, within its territory, any decisions adopted under paragraph 10. It shall inform the Commission of any measures taken to implement such decisions.

12

The Commission shall adopt implementing acts concerning detailed rules in respect of the procedures referred to in this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).

Article 17Access to information

Decisions relating to the allocation of allowances, information on project activities in which a Member State participates or authorises private or public entities to participate, and the reports of emissions required under the greenhouse gas emissions permit and held by the competent authority, shall be made available to the public in accordance with Directive 2003/4/EC.

Article 18Competent authority

Member States shall make the appropriate administrative arrangements, including the designation of the appropriate competent authority or authorities, for the implementation of the rules of this Directive. Where more than one competent authority is designated, the work of these authorities undertaken pursuant to this Directive must be coordinated.

Member States shall in particular ensure coordination between their designated focal point for approving project activities pursuant to Article 6 (1)(a) of the Kyoto Protocol and their designated national authority for the implementation of Article 12 of the Kyoto Protocol respectively designated in accordance with subsequent decisions adopted under the UNFCCC or the Kyoto Protocol.

Article 18aAdministering Member State1

The administering Member State in respect of an aircraft operator shall be:

a

in the case of an aircraft operator with a valid operating licence granted by a Member State in accordance with the provisions of Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers, the Member State which granted the operating licence in respect of that aircraft operator; and

b

in all other cases, the Member State with the greatest estimated attributed aviation emissions from flights performed by that aircraft operator in the base year.

2

Where in the first two years of any period referred to in Article 3c, none of the attributed aviation emissions from flights performed by an aircraft operator falling within paragraph 1(b) of this Article are attributed to its administering Member State, the aircraft operator shall be transferred to another administering Member State in respect of the next period. The new administering Member State shall be the Member State with the greatest estimated attributed aviation emissions from flights performed by that aircraft operator during the first two years of the previous period.

3

Based on the best available information, the Commission shall:

a

before 1 February 2009, publish a list of aircraft operators which performed an aviation activity listed in Annex I on or after 1 January 2006 specifying the administering Member State for each aircraft operator in accordance with paragraph 1; and

b

before 1 February of each subsequent year, update the list to include aircraft operators which have subsequently performed an aviation activity listed in Annex I.

4

The Commission may, in accordance with the examination procedure referred to in Article 22a(2), develop guidelines relating to the administration of aircraft operators under this Directive by administering Member States.

5

For the purposes of paragraph 1, base year means, in relation to an aircraft operator which started operating in the Union after 1 January 2006, the first calendar year of operation, and in all other cases, the calendar year starting on 1 January 2006.

Article 18bAssistance from Eurocontrol

For the purposes of carrying out its obligations under Articles 3c(4) and 18a, the Commission may request the assistance of Eurocontrol or another relevant organisation and may conclude to that effect any appropriate agreements with those organisations.

Article 19Registries1

Allowances issued from 1 January 2012 onwards shall be held in the Union registry for the execution of processes pertaining to the maintenance of the holding accounts opened in the Member State and the allocation, surrender and cancellation of allowances under the Commission Acts referred to in paragraph 3.

Each Member State shall be able to fulfil the execution of authorised operations under the UNFCCC or the Kyoto Protocol.

2

Any person may hold allowances. The registry shall be accessible to the public and shall contain separate accounts to record the allowances held by each person to whom and from whom allowances are issued or transferred.

3

The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive by laying down all necessary requirements concerning the Union Registry for the trading period commencing on 1 January 2013 and subsequent periods, in the form of standardised electronic databases containing common data elements to track the issue, holding, transfer and cancellation, as applicable, of allowances, and to provide for public access and confidentiality, as appropriate. Those delegated acts shall also include provisions to put into effect rules on the mutual recognition of allowances in agreements to link emission trading systems.

4

The Acts referred to in paragraph 3 shall contain appropriate modalities for the Union registry to undertake transactions and other operations to implement arrangements referred to in Article 25(1b). These Acts shall also include processes for the change and incident management for the Union registry with regard to issues in paragraph 1 of this Article. It shall contain appropriate modalities for the Union registry to ensure that initiatives of the Member States pertaining to efficiency improvement, administrative cost management and quality control measures are possible.

Article 20Central Administrator1

The Commission shall designate a Central Administrator to maintain an independent transaction log recording the issue, transfer and cancellation of allowances.

2

The Central Administrator shall conduct an automated check on each transaction in registries through the independent transaction log to ensure there are no irregularities in the issue, transfer and cancellation of allowances.

3

If irregularities are identified through the automated check, the Central Administrator shall inform the Member State or Member States concerned who shall not register the transactions in question or any further transactions relating to the allowances concerned until the irregularities have been resolved.

Article 21Reporting by Member States1

Each year the Member States shall submit to the Commission a report on the application of this Directive. That report shall pay particular attention to the arrangements for the allocation of allowances, the operation of registries, the application of the implementing measures on monitoring and reporting, verification and accreditation and issues relating to compliance with this Directive and on the fiscal treatment of allowances, if any. The first report shall be sent to the Commission by 30 June 2005. The report shall be drawn up on the basis of a questionnaire or outline adopted by the Commission in the form of implementing acts. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2). The questionnaire or outline shall be sent to Member States at least six months before the deadline for the submission of the first report.

2

On the basis of the reports referred to in paragraph 1, the Commission shall publish a report on the application of this Directive within three months of receiving the reports from the Member States.

3

The Commission shall organise an exchange of information between the competent authorities of the Member States concerning developments relating to issues of allocation, the use of ERUs and CERs in the EU ETS, the operation of registries, monitoring, reporting, verification, accreditation, information technology, and compliance with this Directive.

4

Every three years, the report referred to in paragraph 1 shall also pay particular attention to the equivalent measures adopted for small installations excluded from the EU ETS. The issue of equivalent measures adopted for small installations shall also be considered in the exchange of information referred to in paragraph 3.

Article 21aSupport of capacity-building activities

In accordance with the UNFCCC, the Kyoto Protocol and any subsequent decision adopted for their implementation, the Commission and the Member States shall endeavour to support capacity-building activities in developing countries and countries with economies in transition in order to help them take full advantage of JI and the CDM in a manner that supports their sustainable development strategies and to facilitate the engagement of entities in JI and CDM project development and implementation.

Article 22Amendments to the Annexes

The Commission is empowered to adopt delegated acts in accordance with Article 23 to amend, where appropriate, the Annexes to this Directive, with the exception of Annexes I, IIa and IIb, in the light of the reports provided for in Article 21 and of the experience of the application of this Directive. Annexes IV and V may be amended in order to improve the monitoring, reporting and verification of emissions.

Article 22aCommittee procedure1

The Commission shall be assisted by the Climate Change Committee established by Article 26 of Regulation (EU) No 525/2013 of the European Parliament and of the Council. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011 of the European Parliament and of the Council.

2

Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

Where the committee delivers no opinion, the Commission shall not adopt the draft implementing act and the third subparagraph of Article 5(4) of Regulation (EU) No 182/2011 shall apply.

Article 23Exercise of the delegation1

The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

2

The power to adopt delegated acts referred to in Articles 3d(3), 10(4), 10a(1) and (8), 10b(5), 19(3), Article 22, Articles 24(3), 24a(1), 25a(1) and Article 28c shall be conferred on the Commission for an indeterminate period of time from 8 April 2018.

3

The delegation of power referred to in Articles 3d(3), 10(4), 10a(1) and (8), 10b(5), 19(3), Article 22, Articles 24(3), 24a(1), 25a(1) and Article 28c may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

4

Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.

5

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

6

A delegated act adopted pursuant to Articles 3d(3), 10(4), 10a(1) and (8), 10b(5), 19(3), Article 22, Articles 24(3), 24a(1), 25a(1) and Article 28c shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of two months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.

Article 24Procedures for unilateral inclusion of additional activities and gases1

From 2008, Member States may apply emission allowance trading in accordance with this Directive to activities and to greenhouse gases which are not listed in Annex I, taking into account all relevant criteria, in particular the effects on the internal market, potential distortions of competition, the environmental integrity of the EU ETS and the reliability of the planned monitoring and reporting system, provided that the inclusion of such activities and greenhouse gases is approved by the Commission, in accordance with delegated acts which the Commission is empowered to adopt in accordance with Article 23.

2

When the inclusion of additional activities and gases is approved, the Commission may at the same time authorise the issue of additional allowances and may authorise other Member States to include such additional activities and gases.

3

On the initiative of the Commission or at the request of a Member State, these acts may be adopted on the monitoring of, and reporting on, emissions concerning activities, installations and greenhouse gases which are not listed as a combination in Annex I, if that monitoring and reporting can be carried out with sufficient accuracy.

The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive to this effect.

Article 24aHarmonised rules for projects that reduce emissions1

In addition to the inclusions provided for in Article 24, the Commission may adopt measures for issuing allowances or credits in respect of projects administered by Member States that reduce greenhouse gas emissions not covered by the EU ETS.

Such measures shall be consistent with acts adopted pursuant to former Article 11b(7) as in force before 8 April 2018. The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive by setting out the procedure to be followed.

Any such measures shall not result in the double-counting of emission reductions nor impede the undertaking of other policy measures to reduce emissions not covered by the EU ETS. Measures shall only be adopted where inclusion is not possible in accordance with Article 24, and the next review of the EU ETS shall consider harmonising the coverage of those emissions across the Union.

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

A Member State can refuse to issue allowances or credits in respect of certain types of projects that reduce greenhouse gas emissions on its own territory.

Such projects will be executed on the basis of the agreement of the Member State in which the project takes place.

Article 25Links with other greenhouse gas emissions trading systems1

Agreements should be concluded with third countries listed in Annex B to the Kyoto Protocol which have ratified the Protocol to provide for the mutual recognition of allowances between the EU ETS and other greenhouse gas emissions trading systems in accordance with the rules set out in Article 300 of the Treaty.

1a

Agreements may be made to provide for the recognition of allowances between the EU ETS and compatible mandatory greenhouse gas emissions trading systems with absolute emissions caps established in any other country or in sub-federal or regional entities.

1b

Non-binding arrangements may be made with third countries or with sub-federal or regional entities to provide for administrative and technical coordination in relation to allowances in the EU ETS or other mandatory greenhouse gas emissions trading systems with absolute emissions caps.

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 25aThird country measures to reduce the climate change impact of aviation1

Where a third country adopts measures for reducing the climate change impact of flights departing from that third country which land in the Union, the Commission, after consulting with that third country, and with Member States within the Committee referred to in Article 22a(1), shall consider options available in order to provide for optimal interaction between the EU ETS and that country's measures.

The Commission is empowered to adopt delegated acts in accordance with Article 23 to amend Annex I to this Directive to provide for flights arriving from the third country concerned to be excluded from the aviation activities listed in Annex I or to provide for any other amendments to the aviation activities listed in Annex I, except in relation to scope, which are required by an agreement concluded pursuant to Article 218 of the Treaty on the Functioning of the European Union.

The Commission may propose to the European Parliament and the Council any other amendments to this Directive.

The Commission may also, where appropriate, make recommendations to the Council in accordance with Article 300(1) of the Treaty to open negotiations with a view to concluding an agreement with the third country concerned.

2

The Union and its Member States shall continue to seek an agreement on global measures to reduce greenhouse gas emissions from aviation. In the light of any such agreement, the Commission shall consider whether amendments to this Directive as it applies to aircraft operators are necessary.

Article 26Amendment of Directive 96/61/EC

In Article 9(3) of Directive 96/61/EC the following subparagraphs shall be added:

Where emissions of a greenhouse gas from an installation are specified in Annex I to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC in relation to an activity carried out in that installation, the permit shall not include an emission limit value for direct emissions of that gas unless it is necessary to ensure that no significant local pollution is caused.

For activities listed in Annex I to Directive 2003/87/EC, Member States may choose not to impose requirements relating to energy efficiency in respect of combustion units or other units emitting carbon dioxide on the site.

Where necessary, the competent authorities shall amend the permit as appropriate.

The three preceding subparagraphs shall not apply to installations temporarily excluded from the scheme for greenhouse gas emission allowance trading within the Community in accordance with Article 27 of Directive 2003/87/EC.

Article 27Exclusion of small installations subject to equivalent measures1

Following consultation with the operator, Member States may exclude from the EU ETS installations which have reported to the competent authority emissions of less than 25 000 tonnes of carbon dioxide equivalent and, where they carry out combustion activities, have a rated thermal input below 35 MW, excluding emissions from biomass, in each of the three years preceding the notification under point (a), and which are subject to measures that will achieve an equivalent contribution to emission reductions, if the Member State concerned complies with the following conditions:

a

it notifies the Commission of each such installation, specifying the equivalent measures applying to that installation that will achieve an equivalent contribution to emission reductions that are in place, before the list of installations pursuant to Article 11(1) has to be submitted and at the latest when this list is submitted to the Commission;

b

it confirms that monitoring arrangements are in place to assess whether any installation emits 25 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year. Member States may allow simplified monitoring, reporting and verification measures for installations with average annual verified emissions between 2008 and 2010 which are below 5 000 tonnes a year, in accordance with Article 14;

c

it confirms that if any installation emits 25 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year or the measures applying to that installation that will achieve an equivalent contribution to emission reductions are no longer in place, the installation will be reintroduced into the EU ETS;

d

it publishes the information referred to in points (a), (b) and (c) for public comment.

Hospitals may also be excluded if they undertake equivalent measures.

2

If, following a period of three months from the date of notification for public comment, the Commission does not object within a further period of six months, the exclusion shall be deemed approved.

Following the surrender of allowances in respect of the period during which the installation is in the EU ETS, the installation shall be excluded and the Member State shall no longer issue free allowances to the installation pursuant to Article 10a.

3

When an installation is reintroduced into the EU ETS pursuant to paragraph 1(c), any allowances issued pursuant to Article 10a shall be granted starting with the year of the reintroduction. Allowances issued to these installations shall be deducted from the quantity to be auctioned pursuant to Article 10(2) by the Member State in which the installation is situated.

Any such installation shall stay in the EU ETS for the rest of the period referred to in Article 11(1) during which it was reintroduced.

4

For installations which have not been included in the EU ETS during the period from 2008 to 2012, simplified requirements for monitoring, reporting and verification may be applied for determining emissions in the three years preceding the notification under paragraph 1 point (a).

Article 27aOptional exclusion of installations emitting less than 2 500 tonnes1

Member States may exclude from the EU ETS installations that have reported to the competent authority of the Member State concerned emissions of less than 2 500 tonnes of carbon dioxide equivalent, disregarding emissions from biomass, in each of the three years preceding the notification under point (a), provided that the Member State concerned:

a

notifies the Commission of each such installation before the list of installations pursuant to Article 11(1) is to be submitted or at the latest when that list is submitted to the Commission;

b

confirms that simplified monitoring arrangements are in place to assess whether any installation emits 2 500 tonnes or more of carbon dioxide equivalent, disregarding emissions from biomass, in any one calendar year;

c

confirms that if any installation emits 2 500 tonnes or more of carbon dioxide equivalent, disregarding emissions from biomass, in any one calendar year, the installation will be reintroduced into the EU ETS; and

d

makes the information referred to in points (a), (b) and (c) available to the public.

2

When an installation is reintroduced into the EU ETS pursuant to point (c) of paragraph 1 of this Article, any allowances allocated pursuant to Article 10a shall be granted starting from the year of the reintroduction. Allowances allocated to such an installation shall be deducted from the quantity to be auctioned pursuant to Article 10(2) by the Member State in which the installation is situated.

3

Member States may also exclude from the EU ETS reserve or backup units which did not operate more than 300 hours per year in each of the three years preceding the notification under point (a) of paragraph 1, under the same conditions as set out in paragraphs 1 and 2.

Article 28Adjustments applicable upon the approval by the Union of an international agreement on climate change1

Within three months of the signature by the Union of an international agreement on climate change leading, by 2020, to mandatory reductions of greenhouse gas emissions exceeding 20 % compared to 1990 levels, as reflected in the 30 % reduction commitment as endorsed by the European Council of March 2007, the Commission shall submit a report assessing, in particular, the following elements:

a

the nature of the measures agreed upon in the framework of the international negotiations as well as the commitments made by other developed countries to comparable emission reductions to those of the Union and the commitments made by economically more advanced developing countries to contributing adequately according to their responsibilities and respective capabilities;

b

the implications of the international agreement on climate change, and consequently, options required at Union level, in order to move to the more ambitious 30 % reduction target in a balanced, transparent and equitable way, taking into account work under the Kyoto Protocol's first commitment period;

c

the Union manufacturing industries' competitiveness in the context of carbon leakage risks;

d

the impact of the international agreement on climate change on other Union economic sectors;

e

the impact on the Union agriculture sector, including carbon leakage risks;

f

the appropriate modalities for including emissions and removals related to land use, land use change and forestry in the Union;

g

afforestation, reforestation, avoided deforestation and forest degradation in third countries in the event of the establishment of any internationally recognised system in this context;

h

the need for additional Union policies and measures in view of the greenhouse gas reduction commitments of the Union' and of Member States.

2

On the basis of the report referred to in paragraph 1, the Commission shall, as appropriate, submit a legislative proposal to the European Parliament and to the Council amending this Directive pursuant to paragraph 1, with a view to the amending Directive entering into force upon the approval by the Union of the international agreement on climate change and in view of the emission reduction commitment to be implemented under that agreement.

The proposal shall be based upon the principles of transparency, economic efficiency and cost-effectiveness, as well as fairness and solidarity in the distribution of efforts between Member States.

3

The proposal shall allow, as appropriate, operators to use, in addition to the credits provided for in this Directive, CERs, ERUs or other approved credits from third countries which have ratified the international agreement on climate change.

4

The proposal shall also include, as appropriate, any other measures needed to help reach the mandatory reductions in accordance with paragraph 1 in a transparent, balanced and equitable way and, in particular, shall include implementing measures to provide for the use of additional types of project credits by operators in the EU ETS to those referred to in paragraphs 2 to 5 of Article 11a or the use by such operators of other mechanisms created under the international agreement on climate change, as appropriate.

5

The proposal shall include the appropriate transitional and suspensive measures pending the entry into force of the international agreement on climate change.

Article 28aDerogations applicable in advance of the implementation of the ICAO's global market-based measure1

By way of derogation from Articles 12(2a), 14(3) and Article 16, Member States shall consider the requirements set out in those provisions to be satisfied and shall take no action against aircraft operators in respect of:

a

all emissions from flights to and from aerodromes located in countries outside the EEA in each calendar year from 1 January 2013 to 31 December 2023, subject to the review referred to in Article 28b;

b

all emissions from flights between an aerodrome located in an outermost region within the meaning of Article 349 of the Treaty on the Functioning of the European Union and an aerodrome located in another region of the EEA in each calendar year from 1 January 2013 to 31 December 2023, subject to the review referred to in Article 28b.

c

the surrender of allowances, corresponding to verified 2013 emissions from flights between aerodromes located in States in the EEA, taking place by 30 April 2015 instead of 30 April 2014, and verified 2013 emissions for those flights being reported by 31 March 2015 instead of 31 March 2014.

For the purposes of Articles 11a, 12 and 14, the verified emissions from flights other than those referred to in the first subparagraph shall be considered to be the verified emissions of the aircraft operator.

2

By way of derogation from Articles 3e and 3f, aircraft operators benefiting from the derogations provided for in points (a) and (b) of paragraph 1 of this Article shall be issued, each year, with a number of free allowances reduced in proportion to the reduction of the surrender obligation provided for in those points.

By way of derogation from Article 3f(8), allowances that are not allocated from the special reserve shall be cancelled.

From 1 January 2021, the number of allowances allocated to aircraft operators shall be subject to the application of the linear factor referred to in Article 9, subject to the review referred to in Article 28b.

As regards activity in the period from 1 January 2017 to 31 December 2023, Member States shall, before 1 September 2018, publish the number of aviation allowances allocated to each aircraft operator.

3

By way of derogation from Article 3d, Member States shall auction a number of aviation allowances reduced in proportion to the reduction in the total number of allowances issued.

4

By way of derogation from Article 3d(3), the number of allowances to be auctioned by each Member State in respect of the period from 1 January 2013 to 31 December 2023 shall be reduced to correspond to its share of attributed aviation emissions from flights which are not subject to the derogations provided for in points (a) and (b) of paragraph 1 of this Article.

5

By way of derogation from Article 3g, aircraft operators shall not be required to submit monitoring plans setting out measures to monitor and report emissions in respect of flights which are subject to the derogations provided for in points (a) and (b) of paragraph 1 of this Article.

6

By way of derogation from Articles 3g, 12, 15 and 18a, where an aircraft operator has total annual emissions lower than 25 000 tonnes of CO2, or where an aircraft operator has total annual emissions lower than 3 000 tonnes of CO2 from flights other than those referred to in points (a) and (b) of paragraph 1 of this Article, its emissions shall be considered to be verified emissions if determined by using the small emitters tool approved under Commission Regulation (EU) No 606/2010 and populated by Eurocontrol with data from its ETS support facility. Member States may implement simplified procedures for non-commercial aircraft operators as long as such procedures provide no less accuracy than the small emitters tool provides.

7

Paragraph 1 of this Article shall apply to countries with whom an agreement pursuant to Article 25 or 25a has been reached only in line with the terms of such agreement.

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 28bReporting and review by the Commission concerning the implementation of the ICAO's global market-based measure1

Before 1 January 2019 and regularly thereafter, the Commission shall report to the European Parliament and to the Council on progress in the ICAO negotiations to implement the global market-based measure to be applied to emissions from 2021, in particular with regard to: (i) the relevant ICAO instruments, including Standards and Recommended Practices; (ii) ICAO Council-approved recommendations relevant to the global market-based measure; (iii) the establishment of a global registry; (iv) domestic measures taken by third countries to implement the global market-based measure to be applied to emissions from 2021; (v) the implications of reservations by third countries; and (vi) other relevant international developments and applicable instruments.

In line with the UNFCCC's global stocktake, the Commission shall also report on efforts to meet the aviation sector's aspirational long-term emissions reduction goal of halving aviation CO2 emissions relative to 2005 levels by 2050.

2

Within 12 months of the adoption by the ICAO of the relevant instruments, and before the global market-based measure becomes operational, the Commission shall present a report to the European Parliament and to the Council in which it shall consider ways for those instruments to be implemented in Union law through a revision of this Directive. The Commission shall, in that report, also consider the rules applicable in respect of flights within the EEA, as appropriate. It shall also examine the ambition and overall environmental integrity of the global market-based measure, including its general ambition in relation to targets under the Paris Agreement, the level of participation, its enforceability, transparency, the penalties for non-compliance, the processes for public input, the quality of offset credits, monitoring, reporting and verification of emissions, registries, accountability as well as rules on the use of biofuels. In addition, the report shall consider whether the provisions adopted under Article 28c(2) need to be revised.

3

The Commission shall accompany the report referred to in paragraph 2 of this Article with a proposal, where appropriate, to the European Parliament and to the Council to amend, delete, extend or replace the derogations provided for in Article 28a, that is consistent with the Union economy-wide greenhouse gas emission reduction commitment for 2030 with the aim of preserving the environmental integrity and effectiveness of Union climate action.

Article 28cProvisions for monitoring, reporting and verification for the purpose of the global market-based measure

The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the appropriate monitoring, reporting and verification of emissions for the purpose of implementing the ICAO's global market-based measure on all routes covered by it. Those delegated acts shall be based on the relevant instruments adopted in the ICAO, shall avoid any distortion of competition and be consistent with the principles contained in the acts referred to in Article 14(1), and shall ensure that the emissions reports submitted are verified in accordance with the verification principles and criteria laid down in Article 15.

Article 29Report to ensure the better functioning of the carbon market

If, on the basis of the regular reports on the carbon market referred to in Article 10(5), the Commission has evidence that the carbon market is not functioning properly, it shall submit a report to the European Parliament and to the Council. The report may be accompanied, if appropriate, by proposals aiming at increasing transparency of the carbon market and addressing measures to improve its functioning.

Article 29aMeasures in the event of excessive price fluctuations1

If, for more than six consecutive months, the allowance price is more than three times the average price of allowances during the two preceding years on the European carbon market, the Commission shall immediately convene a meeting of the Committee established by Article 9 of Decision No 280/2004/EC.

2

If the price evolution referred to in paragraph 1 does not correspond to changing market fundamentals, one of the following measures may be adopted, taking into account the degree of price evolution:

a

a measure which allows Member States to bring forward the auctioning of a part of the quantity to be auctioned;

b

a measure which allows Member States to auction up to 25 % of the remaining allowances in the new entrants reserve.

Those measures shall be adopted in accordance with the management procedure referred to in Article 23(4).

3

Any measure shall take utmost account of the reports submitted by the Commission to the European Parliament and to the Council pursuant to Article 29, as well as any other relevant information provided by Member States.

4

The arrangements for the application of these provisions shall be laid down in the acts referred to in Article 10(4).

Article 30Review in the light of the implementation of the Paris Agreement and the development of carbon markets in other major economies1

This Directive shall be kept under review in the light of international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement.

2

The measures to support certain energy-intensive industries that may be subject to carbon leakage referred to in Articles 10a and 10b shall also be kept under review in the light of climate policy measures in other major economies. In this context, the Commission shall also consider whether measures in relation to the compensation of indirect costs should be further harmonised.

3

The Commission shall report to the European Parliament and to the Council in the context of each global stocktake agreed under the Paris Agreement, in particular with regard to the need for additional Union policies and measures in view of necessary greenhouse gas reductions by the Union and its Member States, including in relation to the linear factor referred to in Article 9. The Commission may make proposals to the European Parliament and to the Council to amend this Directive where appropriate.

4

Before 1 January 2020, the Commission shall present an updated analysis of the non-CO2 effects of aviation, accompanied, where appropriate, by a proposal on how best to address those effects.

CHAPTER VFINAL PROVISIONS
Article 31Implementation1

Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 2003 at the latest. They shall forthwith inform the Commission thereof. The Commission shall notify the other Member States of these laws, regulations and administrative provisions.

When Member States adopt these measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

2

Member States shall communicate to the Commission the text of the provisions of national law which they adopt in the field covered by this Directive. The Commission shall inform the other Member States thereof.

Article 32Entry into force

This Directive shall enter into force on the day of its publication in the Official Journal of the European Union.

Article 33Addressees

This Directive is addressed to the Member States.

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<source href="#c000002"/>
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<source href="#c000013"/>
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<textualMod type="insertion" eId="mod-O010001M192-f00023">
<source href="#c000013"/>
<destination href="#f00023"/>
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<textualMod type="substitution" eId="mod-O010001M193-f00024">
<source href="#c000001"/>
<destination href="#f00024"/>
</textualMod>
<textualMod type="substitution" eId="mod-O004001M037-f00026">
<source href="#c000005"/>
<destination href="#f00026"/>
</textualMod>
<textualMod type="insertion" eId="mod-O007001M001-f00026">
<source href="#c000016"/>
<destination href="#f00026"/>
</textualMod>
<textualMod type="substitution" eId="mod-O009001M011-f00026">
<source href="#c000009"/>
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</textualMod>
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<restriction href="#article-10a" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-10b" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-10c" refersTo="#e+w+s+ni" type="jurisdiction"/>
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<restriction href="#article-18" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-18a" refersTo="#e+w+s+ni" type="jurisdiction"/>
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<restriction href="#article-22a" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-23" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-24" refersTo="#e+w+s+ni" type="jurisdiction"/>
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<restriction href="#article-25" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-25a" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-26" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-27" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-27a" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-28" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-28a" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-28b" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-28c" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-29" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-29a" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-30" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-31" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-32" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#article-33" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#chapter-I" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#chapter-II" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#chapter-III" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#chapter-IV" refersTo="#e+w+s+ni" type="jurisdiction"/>
<restriction href="#chapter-V" refersTo="#e+w+s+ni" type="jurisdiction"/>
</restrictions>
</analysis>
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</temporalGroup>
<temporalGroup eId="period2">
<timeInterval start="#effective-date-2" refersTo="#period-concept2"/>
</temporalGroup>
<temporalGroup eId="period3">
<timeInterval start="#effective-date-3" refersTo="#period-concept3"/>
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<temporalGroup eId="period4">
<timeInterval start="#effective-date-4" refersTo="#period-concept4"/>
</temporalGroup>
<temporalGroup eId="period5">
<timeInterval start="#effective-date-5" refersTo="#period-concept5"/>
</temporalGroup>
<temporalGroup eId="period6">
<timeInterval start="#effective-date-6" refersTo="#period-concept6"/>
</temporalGroup>
<temporalGroup eId="period7">
<timeInterval start="#effective-date-7" refersTo="#period-concept7"/>
</temporalGroup>
</temporalData>
<references source="#source">
<TLCOrganization eId="source" href="http://www.legislation.gov.uk/id/publisher/KingsOrQueensPrinterOfActsOfParliament" showAs="King's Printer of Acts of Parliament"/>
<TLCLocation eId="e+w+s+ni" href="/ontology/jurisdictions/uk.EnglandWalesScotlandNorthernIreland" showAs="England, Wales, Scotland, Northern Ireland"/>
<TLCConcept eId="period-concept1" href="/ontology/time/2003.10.13" showAs="since 2003-10-13"/>
<TLCConcept eId="period-concept2" href="/ontology/time/2004.11.13" showAs="since 2004-11-13"/>
<TLCConcept eId="period-concept3" href="/ontology/time/2009.02.02" showAs="since 2009-02-02"/>
<TLCConcept eId="period-concept4" href="/ontology/time/2009.06.25" showAs="since 2009-06-25"/>
<TLCConcept eId="period-concept5" href="/ontology/time/2017.12.29" showAs="since 2017-12-29"/>
<TLCConcept eId="period-concept6" href="/ontology/time/2018.04.08" showAs="since 2018-04-08"/>
<TLCConcept eId="period-concept7" href="/ontology/time/2020.01.01" showAs="since 2020-01-01"/>
</references>
<notes source="#source">
<note class="footnote" eId="f00013">
<p>
<ins class="substitution O010001M150-f00013">Directive 2010/75/EU of the European Parliament and of the Council of </ins>
<ins class="substitution O010001M150-f00013">24 November 2010</ins>
<ins class="substitution O010001M150-f00013"> on industrial emissions (integrated pollution prevention and control) (</ins>
<ins class="substitution O010001M150-f00013">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2010.334.01.0017.01.ENG">OJ L 334, 17.12.2010, p. 17</ref>
</ins>
<ins class="substitution O010001M150-f00013">).</ins>
</p>
</note>
<note class="footnote" eId="f00014">
<p>
<ins class="substitution O004001M014-f00014">
<ins class="substitution O010001M152-f00014">Decision (EU) 2015/1814 of the European Parliament and of the Council of </ins>
</ins>
<ins class="substitution O004001M014-f00014">
<ins class="substitution O010001M152-f00014">6 October 2015</ins>
</ins>
<ins class="substitution O004001M014-f00014">
<ins class="substitution O010001M152-f00014"> concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading system and amending Directive 2003/87/EC (</ins>
</ins>
<ins class="substitution O004001M014-f00014">
<ins class="substitution O010001M152-f00014">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2015.264.01.0001.01.ENG">OJ L 264, 9.10.2015, p. 1</ref>
</ins>
</ins>
<ins class="substitution O004001M014-f00014">
<ins class="substitution O010001M152-f00014">).</ins>
</ins>
</p>
</note>
<note class="footnote" eId="f00015">
<p>
<ins class="O004001M015-f00015">
<ins class="O010001M164-f00015">Commission Decision 2011/278/EU of </ins>
</ins>
<ins class="O004001M015-f00015">
<ins class="O010001M164-f00015">27 April 2011</ins>
</ins>
<ins class="O004001M015-f00015">
<ins class="O010001M164-f00015"> determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (</ins>
</ins>
<ins class="O004001M015-f00015">
<ins class="O010001M164-f00015">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2011.130.01.0001.01.ENG">OJ L 130, 17.5.2011, p. 1</ref>
</ins>
</ins>
<ins class="O004001M015-f00015">
<ins class="O010001M164-f00015">).</ins>
</ins>
</p>
</note>
<note class="footnote" eId="f00016">
<p>
<ins class="O004001M015-f00016">
<ins class="substitution O010001M165-f00016">Directive 2012/27/EU of the European Parliament and of the Council of </ins>
</ins>
<ins class="O004001M015-f00016">
<ins class="substitution O010001M165-f00016">25 October 2012</ins>
</ins>
<ins class="O004001M015-f00016">
<ins class="substitution O010001M165-f00016"> on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC (</ins>
</ins>
<ins class="O004001M015-f00016">
<ins class="substitution O010001M165-f00016">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2012.315.01.0001.01.ENG">OJ L 315, 14.11.2012, p. 1</ref>
</ins>
</ins>
<ins class="O004001M015-f00016">
<ins class="substitution O010001M165-f00016">).</ins>
</ins>
</p>
</note>
<note class="footnote" eId="f00017">
<p>
<ins class="O004001M015-f00017">
<ins class="substitution O010001M171-f00017">Commission Decision 2010/670/EU of </ins>
</ins>
<ins class="O004001M015-f00017">
<ins class="substitution O010001M171-f00017">3 November 2010</ins>
</ins>
<ins class="O004001M015-f00017">
<ins class="substitution O010001M171-f00017"> laying down criteria and measures for the financing of commercial demonstration projects that aim at the environmentally safe capture and geological storage of CO</ins>
</ins>
<sub>
<ins class="O004001M015-f00017">
<ins class="substitution O010001M171-f00017">2</ins>
</ins>
</sub>
<ins class="O004001M015-f00017">
<ins class="substitution O010001M171-f00017"> as well as demonstration projects of innovative renewable energy technologies under the system for greenhouse gas emission allowance trading within the Union established by Directive 2003/87/EC of the European Parliament and of the Council (</ins>
</ins>
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2010.290.01.0039.01.ENG">
<ins class="O004001M015-f00017">
<ins class="substitution O010001M171-f00017">OJ L 290, 6.11.2010, p. 39</ins>
</ins>
</ref>
<ins class="O004001M015-f00017">
<ins class="substitution O010001M171-f00017">).</ins>
</ins>
</p>
</note>
<note class="footnote" eId="f00018">
<p>
<ins class="O004001M015-f00018">
<ins class="substitution O010001M178-f00018">Commission Decision 2014/746/EU of </ins>
</ins>
<ins class="O004001M015-f00018">
<ins class="substitution O010001M178-f00018">27 October 2014</ins>
</ins>
<ins class="O004001M015-f00018">
<ins class="substitution O010001M178-f00018"> determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage, for the period 2015 to 2019 (</ins>
</ins>
<ins class="O004001M015-f00018">
<ins class="substitution O010001M178-f00018">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.308.01.0114.01.ENG">OJ L 308, 29.10.2014, p. 114</ref>
</ins>
</ins>
<ins class="O004001M015-f00018">
<ins class="substitution O010001M178-f00018">).</ins>
</ins>
</p>
</note>
<note class="footnote" eId="f00019">
<p>
<ins class="O004001M019-f00019">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2003.096.01.0016.01.ENG">OJ L 96, 12.4.2003, p. 16</ref>
</ins>
<ins class="O004001M019-f00019">.</ins>
</p>
</note>
<note class="footnote" eId="f00020">
<p>
<ins class="O004001M020-f00020">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2009.140.01.0114.01.ENG">OJ L 140, 5.6.2009, p. 114</ref>
</ins>
<ins class="O004001M020-f00020">.</ins>
</p>
</note>
<note class="footnote" eId="f00021">
<p>
<ins class="O002001M022-f00021">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.1992.240.01.0001.01.ENG">OJ L 240, 24.8.1992, p. 1</ref>
</ins>
<ins class="O002001M022-f00021">.</ins>
</p>
</note>
<note class="footnote" eId="f00022">
<p>
<ins class="O010001M192-f00022">Regulation (EU) No 525/2013 of the European Parliament and of the Council of </ins>
<ins class="O010001M192-f00022">21 May 2013</ins>
<ins class="O010001M192-f00022"> on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC (</ins>
<ins class="O010001M192-f00022">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2013.165.01.0013.01.ENG">OJ L 165, 18.6.2013, p. 13</ref>
</ins>
<ins class="O010001M192-f00022">).</ins>
</p>
</note>
<note class="footnote" eId="f00023">
<p>
<ins class="O010001M192-f00023">Regulation (EU) No 182/2011 of the European Parliament and of the Council of </ins>
<ins class="O010001M192-f00023">16 February 2011</ins>
<ins class="O010001M192-f00023"> laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (</ins>
<ins class="O010001M192-f00023">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2011.055.01.0013.01.ENG">OJ L 55, 28.2.2011, p. 13</ref>
</ins>
<ins class="O010001M192-f00023">).</ins>
</p>
</note>
<note class="footnote" eId="f00024">
<p>
<ins class="substitution O010001M193-f00024">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2016.123.01.0001.01.ENG">OJ L 123, 12.5.2016, p. 1</ref>
</ins>
<ins class="substitution O010001M193-f00024">.</ins>
</p>
</note>
<note class="footnote" eId="f00025">
<p>
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2003.275.01.0032.01.ENG">OJ L 275, 25.10.2003, p. 32</ref>
.’
</p>
</note>
<note class="footnote" eId="f00026">
<p>
<ins class="substitution O004001M037-f00026">
<ins class="O007001M001-f00026">
<ins class="substitution O009001M011-f00026">Commission Regulation (EU) No 606/2010 of </ins>
</ins>
</ins>
<ins class="substitution O004001M037-f00026">
<ins class="O007001M001-f00026">
<ins class="substitution O009001M011-f00026">9 July 2010</ins>
</ins>
</ins>
<ins class="substitution O004001M037-f00026">
<ins class="O007001M001-f00026">
<ins class="substitution O009001M011-f00026"> on the approval of a simplified tool developed by the European organisation for air safety navigation (Eurocontrol) to estimate the fuel consumption of certain small emitting aircraft operators (</ins>
</ins>
</ins>
<ins class="substitution O004001M037-f00026">
<ins class="O007001M001-f00026">
<ins class="substitution O009001M011-f00026">
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2010.175.01.0025.01.ENG">OJ L 175, 10.7.2010, p. 25</ref>
</ins>
</ins>
</ins>
<ins class="substitution O004001M037-f00026">
<ins class="O007001M001-f00026">
<ins class="substitution O009001M011-f00026">).</ins>
</ins>
</ins>
</p>
</note>
<note class="commentary F" eId="c000001">
<p>
Substituted by
<ref href="http://www.legislation.gov.uk/id/eudr/2018/410">Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000002">
<p>
Inserted by
<ref href="http://www.legislation.gov.uk/id/eudr/2008/101">Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000003">
<p>
Inserted by
<ref href="http://www.legislation.gov.uk/id/eudr/2009/29">Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000004">
<p>
Substituted by
<ref href="http://www.legislation.gov.uk/id/eudr/2008/101">Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000005">
<p>
Substituted by
<ref href="http://www.legislation.gov.uk/id/eudr/2009/29">Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000006">
<p>
Substituted by
<ref href="http://www.legislation.gov.uk/id/eudr/2004/101">Directive 2004/101/EC of the European Parliament and of the Council of 27 October 2004 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol's project mechanisms (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000007">
<p>
Inserted by
<ref href="http://www.legislation.gov.uk/id/eudr/2004/101">Directive 2004/101/EC of the European Parliament and of the Council of 27 October 2004 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol's project mechanisms (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000008">
<p>
Inserted by
<ref href="http://www.legislation.gov.uk/id/eur/2017/2392">Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021</ref>
.
</p>
</note>
<note class="commentary F" eId="c000009">
<p>
Substituted by
<ref href="http://www.legislation.gov.uk/id/eur/2017/2392">Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021</ref>
.
</p>
</note>
<note class="commentary F" eId="c000010">
<p>
Deleted by
<ref href="http://www.legislation.gov.uk/id/eudr/2018/410">Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000011">
<p>
Inserted by
<ref href="https://webarchive.nationalarchives.gov.uk/eu-exit/https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:12012J/ACT">Treaty between the Kingdom of Belgium, the Republic of Bulgaria, the Czech Republic, the Kingdom of Denmark, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Grand Duchy of Luxembourg, the Republic of Hungary, the Republic of Malta, the Kingdom of the Netherlands, the Republic of Austria, the Republic of Poland, the Portuguese Republic, Romania, the Republic of Slovenia, the Slovak Republic, the Republic of Finland, the Kingdom of Sweden, the United Kingdom of Great Britain and Northern Ireland (Member States of the European Union) and the Republic of Croatia concerning the accession of the Republic of Croatia to the European Union</ref>
.
</p>
</note>
<note class="commentary F" eId="c000012">
<p>
Inserted by
<ref href="http://www.legislation.gov.uk/id/eudn/2015/1814">Decision (EU) 2015/1814 of the European Parliament and of the Council of 6 October 2015 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000013">
<p>
Inserted by
<ref href="http://www.legislation.gov.uk/id/eudr/2018/410">Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000015">
<p>
Deleted by
<ref href="http://www.legislation.gov.uk/id/eudr/2008/101">Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000016">
<p>
Inserted by
<ref href="http://www.legislation.gov.uk/id/eur/2014/421">Regulation (EU) No 421/2014 of the European Parliament and of the Council of 16 April 2014 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions (Text with EEA relevance)</ref>
.
</p>
</note>
<note class="commentary X" eId="c000017">
<p>
Substituted by
<ref href="http://www.legislation.gov.uk/eur/2014/421/pdfs/eurcs_20140421_en_001.pdf">Corrigendum to Regulation (EU) No 421/2014 of the European Parliament and of the Council of 16 April 2014 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions (Official Journal of the European Union L 129 of 30 April 2014)</ref>
.
</p>
</note>
<note class="commentary F" eId="c000018">
<p>
Deleted by
<ref href="http://www.legislation.gov.uk/id/eur/2017/2392">Regulation (EU) 2017/2392 of the European Parliament and of the Council of 13 December 2017 amending Directive 2003/87/EC to continue current limitations of scope for aviation activities and to prepare to implement a global market-based measure from 2021</ref>
.
</p>
</note>
</notes>
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<chapter eId="chapter-I" period="#period6">
<num>
<ins class="O002001M001 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
CHAPTER I
</ins>
</num>
<heading>
<ins class="O002001M001 last">GENERAL PROVISIONS</ins>
</heading>
<article eId="article-1" period="#period6">
<num>Article 1</num>
<heading>Subject matter</heading>
<content>
<p>
This Directive establishes a
<ins class="substitution O010001M359 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
system
</ins>
for greenhouse gas emission allowance trading within the
<ins class="substitution O010001M360 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
(hereinafter referred to as the ‘
<ins class="substitution O010001M001 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
’) in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.
</p>
<p>
<ins class="O004001M001 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
This Directive also provides for the reductions of greenhouse gas emissions to be increased so as to contribute to the levels of reductions that are considered scientifically necessary to avoid dangerous climate change.
</ins>
</p>
<p>
<ins class="O004001M001">This Directive also lays down provisions for assessing and implementing a stricter </ins>
<ins class="O004001M001">
<ins class="substitution O010001M361 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M001"> reduction commitment exceeding 20 %, to be applied upon the approval by the </ins>
<ins class="O004001M001">
<ins class="substitution O010001M361 last">Union</ins>
</ins>
<ins class="O004001M001 last"> of an international agreement on climate change leading to greenhouse gas emission reductions exceeding those required in Article 9, as reflected in the 30 % commitment endorsed by the European Council of March 2007.</ins>
</p>
</content>
</article>
<article eId="article-2" period="#period3">
<num>Article 2</num>
<heading>Scope</heading>
<paragraph eId="article-2-1">
<num>1</num>
<content>
<p>This Directive shall apply to emissions from the activities listed in Annex I and greenhouse gases listed in Annex II.</p>
</content>
</paragraph>
<paragraph eId="article-2-2">
<num>2</num>
<content>
<p>This Directive shall apply without prejudice to any requirements pursuant to Directive 96/61/EC.</p>
</content>
</paragraph>
<paragraph eId="article-2-3">
<num>
<ins class="O002001M002 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
3
</ins>
</num>
<content>
<p>
<ins class="O002001M002 last">The application of this Directive to the airport of Gibraltar is understood to be without prejudice to the respective legal positions of the Kingdom of Spain and the United Kingdom with regard to the dispute over sovereignty over the territory in which the airport is situated.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-3" period="#period6">
<num>Article 3</num>
<heading>Definitions</heading>
<content>
<p>For the purposes of this Directive the following definitions shall apply:</p>
<blockList class="ordered">
<item>
<num>(a)</num>
<p>‘allowance’ means an allowance to emit one tonne of carbon dioxide equivalent during a specified period, which shall be valid only for the purposes of meeting the requirements of this Directive and shall be transferable in accordance with the provisions of this Directive;</p>
</item>
<item>
<num>(b)</num>
<p>
<ins class="substitution O002001M003 first">
<noteRef href="#c000004" marker="F4" class="commentary attribute F"/>
</ins>
<ins class="substitution O002001M003">emissions</ins>
<ins class="substitution O002001M003"></ins>
<ins class="substitution O002001M003 last"> means the release of greenhouse gases into the atmosphere from sources in an installation or the release from an aircraft performing an aviation activity listed in Annex I of the gases specified in respect of that activity;</ins>
</p>
</item>
<item>
<num>(c)</num>
<p>
<ins class="substitution O004001M002 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
</ins>
<ins class="substitution O004001M002">greenhouse gases</ins>
<ins class="substitution O004001M002"></ins>
<ins class="substitution O004001M002 last"> means the gases listed in Annex II and other gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and re-emit infrared radiation;</ins>
</p>
</item>
<item>
<num>(d)</num>
<p>‘greenhouse gas emissions permit’ means the permit issued in accordance with Articles 5 and 6;</p>
</item>
<item>
<num>(e)</num>
<p>‘installation’ means a stationary technical unit where one or more activities listed in Annex I are carried out and any other directly associated activities which have a technical connection with the activities carried out on that site and which could have an effect on emissions and pollution;</p>
</item>
<item>
<num>(f)</num>
<p>‘operator’ means any person who operates or controls an installation or, where this is provided for in national legislation, to whom decisive economic power over the technical functioning of the installation has been delegated;</p>
</item>
<item>
<num>(g)</num>
<p>‘person’ means any natural or legal person;</p>
</item>
<item>
<num>(h)</num>
<p>
<ins class="substitution O010001M146 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
</ins>
<ins class="substitution O010001M146">new entrant</ins>
<ins class="substitution O010001M146"></ins>
<ins class="substitution O010001M146 last"> means any installation carrying out one or more of the activities listed in Annex I, which has obtained a greenhouse gas emissions permit for the first time within the period starting from three months before the date for submission of the list under Article 11(1), and ending three months before the date for the submission of the subsequent list under that Article;</ins>
</p>
</item>
<item>
<num>(i)</num>
<p>‘the public’ means one or more persons and, in accordance with national legislation or practice, associations, organisations or groups of persons;</p>
</item>
<item>
<num>(j)</num>
<p>
‘tonne of carbon dioxide equivalent’ means one metric tonne of carbon dioxide (CO
<sub>2</sub>
) or an amount of any other greenhouse gas listed in Annex II with an equivalent global-warming potential
<ins class="substitution O001001M001 first last">
<noteRef href="#c000006" marker="F6" class="commentary attribute F"/>
;
</ins>
</p>
</item>
<item>
<num>(k)</num>
<p>
<ins class="O001001M002 first">
<noteRef href="#c000007" marker="F7" class="commentary attribute F"/>
</ins>
<ins class="O001001M002">Annex I Party</ins>
<ins class="O001001M002"></ins>
<ins class="O001001M002"> means a Party listed in Annex I to the United Nations Framework Convention on Climate Change (UNFCCC) that has ratified the Kyoto Protocol as specified in Article 1(7) of the Kyoto Protocol;</ins>
</p>
</item>
<item>
<num>(l)</num>
<p>
<ins class="O001001M002"></ins>
<ins class="O001001M002">project activity</ins>
<ins class="O001001M002"></ins>
<ins class="O001001M002"> means a project activity approved by one or more Annex I Parties in accordance with Article 6 or Article 12 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;</ins>
</p>
</item>
<item>
<num>(m)</num>
<p>
<ins class="O001001M002"></ins>
<ins class="O001001M002">emission reduction unit</ins>
<ins class="O001001M002"></ins>
<ins class="O001001M002"> or </ins>
<ins class="O001001M002"></ins>
<ins class="O001001M002">ERU</ins>
<ins class="O001001M002"></ins>
<ins class="O001001M002"> means a unit issued pursuant to Article 6 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;</ins>
</p>
</item>
<item>
<num>(n)</num>
<p>
<ins class="O001001M002"></ins>
<ins class="O001001M002">certified emission reduction</ins>
<ins class="O001001M002"></ins>
<ins class="O001001M002"> or </ins>
<ins class="O001001M002"></ins>
<ins class="O001001M002">CER</ins>
<ins class="O001001M002"></ins>
<ins class="O001001M002 last"> means a unit issued pursuant to Article 12 of the Kyoto Protocol and the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol;</ins>
</p>
</item>
<item>
<num>(o)</num>
<p>
<ins class="O002001M004 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
</ins>
<ins class="O002001M004">aircraft operator</ins>
<ins class="O002001M004"></ins>
<ins class="O002001M004"> means the person who operates an aircraft at the time it performs an aviation activity listed in Annex I or, where that person is not known or is not identified by the owner of the aircraft, the owner of the aircraft;</ins>
</p>
</item>
<item>
<num>(p)</num>
<p>
<ins class="O002001M004"></ins>
<ins class="O002001M004">commercial air transport operator</ins>
<ins class="O002001M004"></ins>
<ins class="O002001M004"> means an operator that, for remuneration, provides scheduled or non-scheduled air transport services to the public for the carriage of passengers, freight or mail;</ins>
</p>
</item>
<item>
<num>(q)</num>
<p>
<ins class="O002001M004">administering Member State</ins>
<ins class="O002001M004"> means the Member State responsible for administering the </ins>
<ins class="O002001M004">
<ins class="substitution O010001M004 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="O002001M004"> in respect of an aircraft operator in accordance with Article 18a;</ins>
</p>
</item>
<item>
<num>(r)</num>
<p>
<ins class="O002001M004"></ins>
<ins class="O002001M004">attributed aviation emissions</ins>
<ins class="O002001M004"></ins>
<ins class="O002001M004"> means emissions from all flights falling within the aviation activities listed in Annex I which depart from an aerodrome situated in the territory of a Member State and those which arrive in such an aerodrome from a third country;</ins>
</p>
</item>
<item>
<num>(s)</num>
<p>
<ins class="O002001M004"></ins>
<ins class="O002001M004">historical aviation emissions</ins>
<ins class="O002001M004"></ins>
<ins class="O002001M004 last"> means the mean average of the annual emissions in the calendar years 2004, 2005 and 2006 from aircraft performing an aviation activity listed in Annex I;</ins>
</p>
</item>
<item>
<num>(t)</num>
<p>
<ins class="O004001M004 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
</ins>
<ins class="O004001M004">combustion</ins>
<ins class="O004001M004"></ins>
<ins class="O004001M004"> means any oxidation of fuels, regardless of the way in which the heat, electrical or mechanical energy produced by this process is used, and any other directly associated activities, including waste gas scrubbing;</ins>
</p>
</item>
<item>
<num>(u)</num>
<p>
<ins class="O004001M004"></ins>
<ins class="O004001M004">electricity generator</ins>
<ins class="O004001M004"></ins>
<ins class="O004001M004"> means an installation that, on or after </ins>
<ins class="O004001M004">1 January 2005</ins>
<ins class="O004001M004">, has produced electricity for sale to third parties, and in which no activity listed in Annex I is carried out other than the </ins>
<ins class="O004001M004"></ins>
<ins class="O004001M004">combustion of fuels</ins>
<ins class="O004001M004"></ins>
<ins class="O004001M004 last">.</ins>
</p>
</item>
</blockList>
</content>
</article>
</chapter>
<chapter eId="chapter-II" period="#period6">
<num>
<ins class="O002001M005 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
CHAPTER II
</ins>
</num>
<heading>
<ins class="O002001M005">AVIATION</ins>
</heading>
<article eId="article-3a" period="#period3">
<num>
<ins class="O002001M005">Article 3a</ins>
</num>
<heading>
<ins class="O002001M005">Scope</ins>
</heading>
<content>
<p>
<ins class="O002001M005">The provisions of this Chapter shall apply to the allocation and issue of allowances in respect of aviation activities listed in Annex I.</ins>
</p>
</content>
</article>
<article eId="article-3b" period="#period6">
<num>
<ins class="O002001M005">Article 3b</ins>
</num>
<heading>
<ins class="O002001M005">Aviation activities</ins>
</heading>
<content>
<p>
<ins class="O002001M005">By </ins>
<ins class="O002001M005">2 August 2009</ins>
<ins class="O002001M005">, the Commission shall, in accordance with the </ins>
<ins class="O002001M005">
<ins class="substitution O010001M126 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
examination procedure referred to in Article 22a(2)
</ins>
</ins>
<ins class="O002001M005">, develop guidelines on the detailed interpretation of the aviation activities listed in Annex I.</ins>
</p>
</content>
</article>
<article eId="article-3c" period="#period6">
<num>
<ins class="O002001M005">Article 3c</ins>
</num>
<heading>
<ins class="O002001M005">Total quantity of allowances for aviation</ins>
</heading>
<paragraph eId="article-3c-1">
<num>
<ins class="O002001M005">1</ins>
</num>
<content>
<p>
<ins class="O002001M005">For the period from </ins>
<ins class="O002001M005">1 January 2012</ins>
<ins class="O002001M005"> to </ins>
<ins class="O002001M005">31 December 2012</ins>
<ins class="O002001M005">, the total quantity of allowances to be allocated to aircraft operators shall be equivalent to 97 % of the historical aviation emissions.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3c-2">
<num>
<ins class="O002001M005">2</ins>
</num>
<content>
<p>
<ins class="O002001M005">For the period referred to in </ins>
<ins class="O002001M005">
<ins class="substitution O010001M133 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Article 13
</ins>
</ins>
<ins class="O002001M005"> beginning on </ins>
<ins class="O002001M005">1 January 2013</ins>
<ins class="O002001M005">, and, in the absence of any amendments following the review referred to in Article 30(4), for each subsequent period, the total quantity of allowances to be allocated to aircraft operators shall be equivalent to 95 % of the historical aviation emissions multiplied by the number of years in the period.</ins>
</p>
<p>
<ins class="O002001M005">This percentage may be reviewed as part of the general review of this Directive.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3c-3">
<num>
<ins class="O002001M005">3</ins>
</num>
<content>
<p>
<ins class="O002001M005">The Commission shall review the total quantity of allowances to be allocated to aircraft operators in accordance with Article 30(4).</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3c-3a">
<num>
<ins class="O002001M005">
<ins class="O009001M001 first">
<noteRef href="#c000008" marker="F8" class="commentary attribute F"/>
3a
</ins>
</ins>
</num>
<content>
<p>
<ins class="O002001M005">
<ins class="O009001M001">Any allocation of allowances for aviation activities to and from aerodromes located in countries outside the European Economic Area (</ins>
</ins>
<ins class="O002001M005">
<ins class="O009001M001"></ins>
</ins>
<ins class="O002001M005">
<ins class="O009001M001">EEA</ins>
</ins>
<ins class="O002001M005">
<ins class="O009001M001"></ins>
</ins>
<ins class="O002001M005">
<ins class="O009001M001">) after </ins>
</ins>
<ins class="O002001M005">
<ins class="O009001M001">31 December 2023</ins>
</ins>
<ins class="O002001M005">
<ins class="O009001M001 last"> shall be subject to the review referred to in Article 28b.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3c-4">
<num>
<ins class="O002001M005">4</ins>
</num>
<content>
<p>
<ins class="O002001M005">By </ins>
<ins class="O002001M005">2 August 2009</ins>
<ins class="O002001M005">, the Commission shall decide on the historical aviation emissions, based on best available data, including estimates based on actual traffic information. That decision shall be considered within the Committee referred to in Article 23(1).</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-3d" period="#period6">
<num>
<ins class="O002001M005">Article 3d</ins>
</num>
<heading>
<ins class="O002001M005">Method of allocation of allowances for aviation through auctioning</ins>
</heading>
<paragraph eId="article-3d-1">
<num>
<ins class="O002001M005">1</ins>
</num>
<content>
<p>
<ins class="O002001M005">In the period referred to in Article 3c(1), 15 % of allowances shall be auctioned.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3d-2">
<num>
<ins class="O002001M005">
<ins class="substitution O009001M002 first">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
2
</ins>
</ins>
</num>
<content>
<p>
<ins class="O002001M005">
<ins class="substitution O009001M002">From </ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O009001M002">1 January 2013</ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O009001M002">, 15 % of allowances shall be auctioned. The Commission shall undertake a study on the ability of the aviation sector to pass on the cost of CO</ins>
</ins>
<sub>
<ins class="O002001M005">
<ins class="substitution O009001M002">2</ins>
</ins>
</sub>
<ins class="O002001M005">
<ins class="substitution O009001M002"> to its customers, in relation to the EU ETS and to the global market-based measure developed by the International Civil Aviation Organization (</ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O009001M002">ICAO</ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O009001M002 last">). The study shall assess the ability of the aviation sector to pass on the cost of required emission units, comparing this to industries and to the power sector, with the intention of making a proposal to increase the percentage of auctioning pursuant to the review referred to in Article 28b(2), taking into account the analysis of costs passed on and considering alignment with other sectors and the competitiveness between different modes of transport.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3d-3">
<num>
<ins class="O002001M005">
<ins class="substitution O010001M147 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
3
</ins>
</ins>
</num>
<content>
<p>
<ins class="O002001M005">
<ins class="substitution O010001M147 last">The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the detailed arrangements for the auctioning by Member States of aviation allowances in accordance with paragraphs 1 and 2 of this Article or with Article 3f(8). The number of allowances to be auctioned in each period by each Member State shall be proportionate to its share of the total attributed aviation emissions for all Member States for the reference year reported pursuant to Article 14(3) and verified pursuant to Article 15. For the period referred to in Article 3c(1), the reference year shall be 2010, and for each subsequent period referred to in Article 3c, the reference year shall be the calendar year ending 24 months before the start of the period to which the auction relates. The delegated acts shall ensure that the principles set out in the first subparagraph of Article 10(4) are respected.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3d-4">
<num>
<ins class="O002001M005">
<ins class="substitution O009001M003 first">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
4
</ins>
</ins>
</num>
<content>
<p>
<ins class="O002001M005">
<ins class="substitution O009001M003">All revenues generated from the auctioning of allowances should be used to tackle climate change in the Union and third countries, inter alia, to reduce greenhouse gas emissions, to adapt to the impacts of climate change in the Union and third countries, especially developing countries, to fund research and development for mitigation and adaptation, including in particular in the fields of aeronautics and air transport, to reduce emissions through low-emission transport and to cover the cost of administering the EU ETS. Auctioning revenues should also be used to fund common projects to reduce greenhouse gas emissions from the aviation sector, such as the Single European Sky ATM Research (SESAR) Joint Undertaking and the Clean Sky Joint Technology Initiatives and any initiatives enabling the widespread use of GNSS for satellite-based navigation and interoperable capabilities within all Member States, in particular projects that improve air navigation infrastructure, the provision of air navigation services and the use of airspace. The proceeds of auctioning may also be used to fund contributions to the Global Energy Efficiency and Renewable Energy Fund, and measures to avoid deforestation. Special consideration shall be given by Member States that use those revenues for co-financing research and innovation to programmes or initiatives under the Ninth Research Framework Programme (</ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O009001M003"></ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O009001M003">FP9</ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O009001M003"></ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O009001M003">). Transparency on the use of revenues generated from the auctioning of allowances under this Directive is essential to meeting Union commitments.</ins>
</ins>
</p>
<p>
<ins class="O002001M005">
<ins class="substitution O009001M003 last">Member States shall inform the Commission of actions taken pursuant to the first subparagraph of this paragraph.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3d-5">
<num>
<ins class="O002001M005">5</ins>
</num>
<content>
<p>
<ins class="O002001M005">Information provided to the Commission pursuant to this Directive does not free Member States from the notification obligation laid down in Article 88(3) of the Treaty.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-3e" period="#period3">
<num>
<ins class="O002001M005">Article 3e</ins>
</num>
<heading>
<ins class="O002001M005">Allocation and issue of allowances to aircraft operators</ins>
</heading>
<paragraph eId="article-3e-1">
<num>
<ins class="O002001M005">1</ins>
</num>
<content>
<p>
<ins class="O002001M005">For each period referred to in Article 3c, each aircraft operator may apply for an allocation of allowances that are to be allocated free of charge. An application may be made by submitting to the competent authority in the administering Member State verified tonne-kilometre data for the aviation activities listed in Annex I performed by that aircraft operator for the monitoring year. For the purposes of this Article, the monitoring year shall be the calendar year ending 24 months before the start of the period to which it relates in accordance with Annexes IV and V or, in relation to the period referred to in Article 3c(1), 2010. Any application shall be made at least 21 months before the start of the period to which it relates or, in relation to the period referred to in Article 3c(1), by </ins>
<ins class="O002001M005">31 March 2011</ins>
<ins class="O002001M005">.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3e-2">
<num>
<ins class="O002001M005">2</ins>
</num>
<content>
<p>
<ins class="O002001M005">At least 18 months before the start of the period to which the application relates or, in relation to the period referred to in Article 3c(1), by </ins>
<ins class="O002001M005">30 June 2011</ins>
<ins class="O002001M005">, Member States shall submit applications received under paragraph 1 to the Commission.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3e-3">
<num>
<ins class="O002001M005">3</ins>
</num>
<intro>
<p>
<ins class="O002001M005">At least 15 months before the start of each period referred to in Article 3c(2) or, in relation to the period referred to in Article 3c(1), by </ins>
<ins class="O002001M005">30 September 2011</ins>
<ins class="O002001M005">, the Commission shall calculate and adopt a decision setting out:</ins>
</p>
</intro>
<subparagraph eId="d4e1093">
<num>
<ins class="O002001M005">a</ins>
</num>
<content>
<p>
<ins class="O002001M005">the total quantity of allowances to be allocated for that period in accordance with Article 3c;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1101">
<num>
<ins class="O002001M005">b</ins>
</num>
<content>
<p>
<ins class="O002001M005">the number of allowances to be auctioned in that period in accordance with Article 3d;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1109">
<num>
<ins class="O002001M005">c</ins>
</num>
<content>
<p>
<ins class="O002001M005">the number of allowances in the special reserve for aircraft operators in that period in accordance with Article 3f(1);</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1117">
<num>
<ins class="O002001M005">d</ins>
</num>
<content>
<p>
<ins class="O002001M005">the number of allowances to be allocated free of charge in that period by subtracting the number of allowances referred to in points (b) and (c) from the total quantity of allowances decided upon under point (a); and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1125">
<num>
<ins class="O002001M005">e</ins>
</num>
<content>
<p>
<ins class="O002001M005">the benchmark to be used to allocate allowances free of charge to aircraft operators whose applications were submitted to the Commission in accordance with paragraph 2.</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="O002001M005">The benchmark referred to in point (e), expressed as allowances per tonne-kilometre, shall be calculated by dividing the number of allowances referred to in point (d) by the sum of the tonne-kilometre data included in applications submitted to the Commission in accordance with paragraph 2.</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-3e-4">
<num>
<ins class="O002001M005">4</ins>
</num>
<intro>
<p>
<ins class="O002001M005">Within three months from the date on which the Commission adopts a decision under paragraph 3, each administering Member State shall calculate and publish:</ins>
</p>
</intro>
<subparagraph eId="d4e1145">
<num>
<ins class="O002001M005">a</ins>
</num>
<content>
<p>
<ins class="O002001M005">the total allocation of allowances for the period to each aircraft operator whose application it submitted to the Commission in accordance with paragraph 2, calculated by multiplying the tonne-kilometre data included in the application by the benchmark referred to in paragraph 3(e); and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1153">
<num>
<ins class="O002001M005">b</ins>
</num>
<content>
<p>
<ins class="O002001M005">the allocation of allowances to each aircraft operator for each year, which shall be determined by dividing its total allocation of allowances for the period calculated under point (a) by the number of years in the period for which that aircraft operator is performing an aviation activity listed in Annex I.</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-3e-5">
<num>
<ins class="O002001M005">5</ins>
</num>
<content>
<p>
<ins class="O002001M005">By </ins>
<ins class="O002001M005">28 February 2012</ins>
<ins class="O002001M005"> and by 28 February of each subsequent year, the competent authority of the administering Member State shall issue to each aircraft operator the number of allowances allocated to that aircraft operator for that year under this Article or Article 3f.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-3f" period="#period6">
<num>
<ins class="O002001M005">Article 3f</ins>
</num>
<heading>
<ins class="O002001M005">Special reserve for certain aircraft operators</ins>
</heading>
<paragraph eId="article-3f-1">
<num>
<ins class="O002001M005">1</ins>
</num>
<intro>
<p>
<ins class="O002001M005">In each period referred to in Article 3c(2), 3 % of the total quantity of allowances to be allocated shall be set aside in a special reserve for aircraft operators:</ins>
</p>
</intro>
<subparagraph eId="d4e1190">
<num>
<ins class="O002001M005">a</ins>
</num>
<content>
<p>
<ins class="O002001M005">who start performing an aviation activity falling within Annex I after the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2); or</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1198">
<num>
<ins class="O002001M005">b</ins>
</num>
<content>
<p>
<ins class="O002001M005">whose tonne-kilometre data increases by an average of more than 18 % annually between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period;</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="O002001M005">and whose activity under point (a), or additional activity under point (b), is not in whole or in part a continuation of an aviation activity previously performed by another aircraft operator.</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-3f-2">
<num>
<ins class="O002001M005">2</ins>
</num>
<content>
<p>
<ins class="O002001M005">An aircraft operator who is eligible under paragraph 1 may apply for a free allocation of allowances from the special reserve by making an application to the competent authority of its administering Member State. Any application shall be made by 30 June in the third year of the period referred to in Article 3c(2) to which it relates.</ins>
</p>
<p>
<ins class="O002001M005">An allocation to an aircraft operator under paragraph 1(b) shall not exceed </ins>
<ins class="O002001M005">1 000 000</ins>
<ins class="O002001M005"> allowances.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3f-3">
<num>
<ins class="O002001M005">3</ins>
</num>
<intro>
<p>
<ins class="O002001M005">An application under paragraph 2 shall:</ins>
</p>
</intro>
<subparagraph eId="d4e1233">
<num>
<ins class="O002001M005">a</ins>
</num>
<content>
<p>
<ins class="O002001M005">include verified tonne-kilometre data in accordance with Annexes IV and V for the aviation activities listed in Annex I performed by the aircraft operator in the second calendar year of the period referred to in Article 3c(2) to which the application relates;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1241">
<num>
<ins class="O002001M005">b</ins>
</num>
<content>
<p>
<ins class="O002001M005">provide evidence that the criteria for eligibility under paragraph 1 are fulfilled; and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1249">
<num>
<ins class="O002001M005">c</ins>
</num>
<content>
<p>
<ins class="O002001M005">in the case of aircraft operators falling within paragraph 1(b), state:</ins>
</p>
<blockList class="ordered">
<item>
<num>(i)</num>
<p>
<ins class="O002001M005">the percentage increase in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period;</ins>
</p>
</item>
<item>
<num>(ii)</num>
<p>
<ins class="O002001M005">the absolute growth in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period; and</ins>
</p>
</item>
<item>
<num>(iii)</num>
<p>
<ins class="O002001M005">the absolute growth in tonne-kilometres performed by that aircraft operator between the monitoring year for which tonne-kilometre data was submitted under Article 3e(1) in respect of a period referred to in Article 3c(2) and the second calendar year of that period which exceeds the percentage specified in paragraph 1(b).</ins>
</p>
</item>
</blockList>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-3f-4">
<num>
<ins class="O002001M005">4</ins>
</num>
<content>
<p>
<ins class="O002001M005">No later than six months from the deadline for making an application under paragraph 2, Member States shall submit applications received under that paragraph to the Commission.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3f-5">
<num>
<ins class="O002001M005">5</ins>
</num>
<intro>
<p>
<ins class="O002001M005">No later than 12 months from the deadline for making an application under paragraph 2, the Commission shall decide on the benchmark to be used to allocate allowances free of charge to aircraft operators whose applications were submitted to the Commission in accordance with paragraph 4.</ins>
</p>
<p>
<ins class="O002001M005">Subject to paragraph 6, the benchmark shall be calculated by dividing the number of the allowances in the special reserve by the sum of:</ins>
</p>
</intro>
<subparagraph eId="d4e1294">
<num>
<ins class="O002001M005">a</ins>
</num>
<content>
<p>
<ins class="O002001M005">the tonne-kilometre data for aircraft operators falling within paragraph 1(a) included in applications submitted to the Commission in accordance with paragraphs 3(a) and 4; and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1302">
<num>
<ins class="O002001M005">b</ins>
</num>
<content>
<p>
<ins class="O002001M005">the absolute growth in tonne-kilometres exceeding the percentage specified in paragraph 1(b) for aircraft operators falling within paragraph 1(b) included in applications submitted to the Commission in accordance with paragraphs 3(c)(iii) and 4.</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-3f-6">
<num>
<ins class="O002001M005">6</ins>
</num>
<content>
<p>
<ins class="O002001M005">The benchmark referred to in paragraph 5 shall not result in an annual allocation per tonne-kilometre greater than the annual allocation per tonne-kilometre to aircraft operators under Article 3e(4).</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3f-7">
<num>
<ins class="O002001M005">7</ins>
</num>
<intro>
<p>
<ins class="O002001M005">Within three months from the date on which the Commission adopts a decision under paragraph 5, each administering Member State shall calculate and publish:</ins>
</p>
</intro>
<subparagraph eId="d4e1326">
<num>
<ins class="O002001M005">a</ins>
</num>
<content>
<p>
<ins class="O002001M005">the allocation of allowances from the special reserve to each aircraft operator whose application it submitted to the Commission in accordance with paragraph 4. This allocation shall be calculated by multiplying the benchmark referred to in paragraph 5 by:</ins>
</p>
<blockList class="ordered">
<item>
<num>(i)</num>
<p>
<ins class="O002001M005">in the case of an aircraft operator falling within paragraph 1(a), the tonne-kilometre data included in the application submitted to the Commission under paragraphs 3(a) and 4;</ins>
</p>
</item>
<item>
<num>(ii)</num>
<p>
<ins class="O002001M005">in the case of an aircraft operator falling within paragraph 1(b), the absolute growth in tonne-kilometres exceeding the percentage specified in paragraph 1(b) included in the application submitted to the Commission under paragraphs 3(c)(iii) and 4; and</ins>
</p>
</item>
</blockList>
</content>
</subparagraph>
<subparagraph eId="d4e1346">
<num>
<ins class="O002001M005">b</ins>
</num>
<content>
<p>
<ins class="O002001M005">the allocation of allowances to each aircraft operator for each year, which shall be determined by dividing its allocation of allowances under point (a) by the number of full calendar years remaining in the period referred to in Article 3c(2) to which the allocation relates.</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-3f-8">
<num>
<ins class="O002001M005">8</ins>
</num>
<content>
<p>
<ins class="O002001M005">Any unallocated allowances in the special reserve shall be auctioned by Member States.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-3f-9">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
9
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
</article>
<article eId="article-3g" period="#period6">
<num>
<ins class="O002001M005">Article 3g</ins>
</num>
<heading>
<ins class="O002001M005">Monitoring and reporting plans</ins>
</heading>
<content>
<p>
<ins class="O002001M005">The administering Member State shall ensure that each aircraft operator submits to the competent authority in that Member State a monitoring plan setting out measures to monitor and report emissions and tonne-kilometre data for the purpose of an application under Article 3e and that such plans are approved by the competent authority in accordance with </ins>
<ins class="O002001M005">
<ins class="substitution O004001M006 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
the
</ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O004001M006">
<ins class="substitution O010001M135 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
</ins>
<ins class="O002001M005">
<ins class="substitution O004001M006 last"> referred to in Article 14</ins>
</ins>
<ins class="O002001M005 last">.</ins>
</p>
</content>
</article>
</chapter>
<chapter eId="chapter-III" period="#period6">
<num>
<ins class="O002001M006 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
CHAPTER III
</ins>
</num>
<heading>
<ins class="O002001M006">STATIONARY INSTALLATIONS</ins>
</heading>
<article eId="article-3h" period="#period3">
<num>
<ins class="O002001M006">Article 3h</ins>
</num>
<heading>
<ins class="O002001M006">Scope</ins>
</heading>
<content>
<p>
<ins class="O002001M006 last">The provisions of this Chapter shall apply to greenhouse gas emissions permits and the allocation and issue of allowances in respect of activities listed in Annex I other than aviation activities.</ins>
</p>
</content>
</article>
<article eId="article-4" period="#period6">
<num>
<ins class="substitution O004001M007">Article 4</ins>
</num>
<heading>
<ins class="substitution O004001M007 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
Greenhouse gas emissions permits
</ins>
</heading>
<content>
<p>
<ins class="substitution O004001M007">Member States shall ensure that, from </ins>
<ins class="substitution O004001M007">1 January 2005</ins>
<ins class="substitution O004001M007">, no installation carries out any activity listed in Annex I resulting in emissions specified in relation to that activity unless its operator holds a permit issued by a competent authority in accordance with Articles 5 and 6, or the installation is excluded from the </ins>
<ins class="substitution O004001M007">
<ins class="substitution O010001M005 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M007 last"> pursuant to Article 27. This shall also apply to installations opted in under Article 24.</ins>
</p>
</content>
</article>
<article eId="article-5" period="#period6">
<num>Article 5</num>
<heading>Applications for greenhouse gas emissions permits</heading>
<content>
<p>An application to the competent authority for a greenhouse gas emissions permit shall include a description of:</p>
<blockList class="ordered">
<item>
<num>(a)</num>
<p>the installation and its activities including the technology used;</p>
</item>
<item>
<num>(b)</num>
<p>the raw and auxiliary materials, the use of which is likely to lead to emissions of gases listed in Annex I;</p>
</item>
<item>
<num>(c)</num>
<p>the sources of emissions of gases listed in Annex I from the installation; and</p>
</item>
<item>
<num>(d)</num>
<p>
<ins class="substitution O004001M008 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
the measures planned to monitor and report emissions in accordance with the
</ins>
<ins class="substitution O004001M008">
<ins class="substitution O010001M136 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
<ins class="substitution O004001M008 last"> referred to in Article 14.</ins>
</p>
</item>
</blockList>
<p>The application shall also include a non-technical summary of the details referred to in the first subparagraph.</p>
</content>
</article>
<article eId="article-6" period="#period6">
<num>Article 6</num>
<heading>Conditions for and contents of the greenhouse gas emissions permit</heading>
<paragraph eId="article-6-1">
<num>1</num>
<content>
<p>The competent authority shall issue a greenhouse gas emissions permit granting authorisation to emit greenhouse gases from all or part of an installation if it is satisfied that the operator is capable of monitoring and reporting emissions.</p>
<p>A greenhouse gas emissions permit may cover one or more installations on the same site operated by the same operator.</p>
<p>
<del class="O010001M149000 first last">
<noteRef href="#c000010" marker="F10" class="commentary F"/>
. . . . .
</del>
</p>
</content>
</paragraph>
<paragraph eId="article-6-2">
<num>2</num>
<intro>
<p>Greenhouse gas emissions permits shall contain the following:</p>
</intro>
<subparagraph eId="d4e1496">
<num>a</num>
<content>
<p>the name and address of the operator;</p>
</content>
</subparagraph>
<subparagraph eId="d4e1502">
<num>b</num>
<content>
<p>a description of the activities and emissions from the installation;</p>
</content>
</subparagraph>
<subparagraph eId="d4e1508">
<num>
<ins class="substitution O004001M010 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
c
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M010">a monitoring plan that fulfils the requirements under the </ins>
<ins class="substitution O004001M010">
<ins class="substitution O010001M137 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
<ins class="substitution O004001M010 last"> referred to in Article 14. Member States may allow operators to update monitoring plans without changing the permit. Operators shall submit any updated monitoring plans to the competent authority for approval;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1521">
<num>d</num>
<content>
<p>reporting requirements; and</p>
</content>
</subparagraph>
<subparagraph eId="d4e1527">
<num>
<ins class="substitution O002001M007 first">
<noteRef href="#c000004" marker="F4" class="commentary attribute F"/>
e
</ins>
</num>
<content>
<p>
<ins class="substitution O002001M007 last">an obligation to surrender allowances, other than allowances issued under Chapter II, equal to the total emissions of the installation in each calendar year, as verified in accordance with Article 15, within four months following the end of that year.</ins>
</p>
</content>
</subparagraph>
</paragraph>
</article>
<article eId="article-7" period="#period4">
<num>
<ins class="substitution O004001M011">Article 7</ins>
</num>
<heading>
<ins class="substitution O004001M011 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
Changes relating to installations
</ins>
</heading>
<content>
<p>
<ins class="substitution O004001M011 last">The operator shall inform the competent authority of any planned changes to the nature or functioning of the installation, or any extension or significant reduction of its capacity, which may require updating the greenhouse gas emissions permit. Where appropriate, the competent authority shall update the permit. Where there is a change in the identity of the installation's operator, the competent authority shall update the permit to include the name and address of the new operator.</ins>
</p>
</content>
</article>
<article eId="article-8" period="#period6">
<num>
<ins class="substitution O010001M150">Article 8</ins>
</num>
<heading>
<ins class="substitution O010001M150 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Coordination with Directive 2010/75/EU
</ins>
</heading>
<content>
<p>
<ins class="substitution O010001M150">Member States shall take the necessary measures to ensure that, where installations carry out activities that are included in Annex I to Directive 2010/75/EU of the European Parliament and of the Council</ins>
<noteRef href="#f00013" class="footnote" marker="13"/>
<ins class="substitution O010001M150 last">, the conditions and procedure for the issue of a greenhouse gas emissions permit are coordinated with those for the issue of a permit provided for in that Directive. The requirements laid down in Articles 5, 6 and 7 of this Directive may be integrated into the procedures provided for in Directive 2010/75/EU.</ins>
</p>
</content>
</article>
<article eId="article-9" period="#period6">
<num>
<ins class="substitution O004001M012">Article 9</ins>
</num>
<heading>
<ins class="substitution O004001M012 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
<ins class="substitution O010001M067 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M012">-wide quantity of allowances</ins>
</heading>
<content>
<p>
<ins class="substitution O004001M012">The </ins>
<ins class="substitution O004001M012">
<ins class="substitution O010001M068 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M012">-wide quantity of allowances issued each year starting in 2013 shall decrease in a linear manner beginning from the mid-point of the period from 2008 to 2012. The quantity shall decrease by a linear factor of 1,74 % compared to the average annual total quantity of allowances issued by Member States in accordance with the Commission Decisions on their national allocation plans for the period from 2008 to 2012. </ins>
<ins class="substitution O004001M012">
<ins class="O005001M001 first">
<noteRef href="#c000011" marker="F11" class="commentary attribute F"/>
The
</ins>
</ins>
<ins class="substitution O004001M012">
<ins class="O005001M001">
<ins class="substitution O010001M068 last">Union</ins>
</ins>
</ins>
<ins class="substitution O004001M012">
<ins class="O005001M001 last">-wide quantity of allowances will be increased as a result of Croatia's accession only by the quantity of allowances that Croatia shall auction pursuant to Article 10(1).</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M012 last">
<ins class="substitution O010001M151 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Starting in 2021, the linear factor shall be 2,2 %.
</ins>
</ins>
</p>
</content>
</article>
<article eId="article-9a" period="#period6">
<num>
<ins class="O004001M013">Article 9a</ins>
</num>
<heading>
<ins class="O004001M013 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
Adjustment of the
</ins>
<ins class="O004001M013">
<ins class="substitution O010001M070 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M013">-wide quantity of allowances</ins>
</heading>
<paragraph eId="article-9a-1">
<num>
<ins class="O004001M013">1</ins>
</num>
<content>
<p>
<ins class="O004001M013">In respect of installations that were included in the </ins>
<ins class="O004001M013">
<ins class="substitution O010001M006 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="O004001M013"> during the period from 2008 to 2012 pursuant to Article 24(1), the quantity of allowances to be issued from </ins>
<ins class="O004001M013">1 January 2013</ins>
<ins class="O004001M013"> shall be adjusted to reflect the average annual quantity of allowances issued in respect of those installations during the period of their inclusion, adjusted by the linear factor referred to in Article 9.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-9a-2">
<num>
<ins class="O004001M013">2</ins>
</num>
<content>
<p>
<ins class="O004001M013">In respect of installations carrying out activities listed in Annex I, which are only included in the </ins>
<ins class="O004001M013">
<ins class="substitution O010001M007 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="O004001M013"> from 2013 onwards, Member States shall ensure that the operators of such installations submit to the relevant competent authority duly substantiated and independently verified emissions data in order for them to be taken into account for the adjustment of the </ins>
<ins class="O004001M013">
<ins class="substitution O010001M071 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M013">-wide quantity of allowances to be issued.</ins>
</p>
<p>
<ins class="O004001M013">Any such data shall be submitted, by </ins>
<ins class="O004001M013">30 April 2010</ins>
<ins class="O004001M013">, to the relevant competent authority in accordance with the provisions adopted pursuant to Article 14(1).</ins>
</p>
<p>
<ins class="O004001M013">If the data submitted are duly substantiated, the competent authority shall notify the Commission thereof by </ins>
<ins class="O004001M013">30 June 2010</ins>
<ins class="O004001M013"> and the quantity of allowances to be issued, adjusted by the linear factor referred to in Article 9, shall be adjusted accordingly. In the case of installations emitting greenhouse gases other than CO</ins>
<sub>
<ins class="O004001M013">2</ins>
</sub>
<ins class="O004001M013">, the competent authority may notify a lower amount of emissions according to the emission reduction potential of those installations.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-9a-3">
<num>
<ins class="O004001M013">3</ins>
</num>
<content>
<p>
<ins class="O004001M013">The Commission shall publish the adjusted quantities referred to in paragraphs 1 and 2 by </ins>
<ins class="O004001M013">30 September 2010</ins>
<ins class="O004001M013">.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-9a-4">
<num>
<ins class="O004001M013">4</ins>
</num>
<content>
<p>
<ins class="O004001M013">In respect of installations which are excluded from the </ins>
<ins class="O004001M013">
<ins class="substitution O010001M008 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="O004001M013"> in accordance with Article 27, the </ins>
<ins class="O004001M013">
<ins class="substitution O010001M072 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M013">-wide quantity of allowances to be issued from </ins>
<ins class="O004001M013">1 January 2013</ins>
<ins class="O004001M013 last"> shall be adjusted downwards to reflect the average annual verified emissions of those installations in the period from 2008 to 2010, adjusted by the linear factor referred to in Article 9.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-10" period="#period6">
<num>
<ins class="substitution O004001M014">Article 10</ins>
</num>
<heading>
<ins class="substitution O004001M014 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
Auctioning of allowances
</ins>
</heading>
<paragraph eId="article-10-1">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
1
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152">From 2019 onwards, Member States shall auction all allowances that are not allocated free of charge in accordance with Articles 10a and 10c of this Directive and that are not placed in the market stability reserve established by Decision (EU) 2015/1814 of the European Parliament and of the Council</ins>
</ins>
<noteRef href="#f00014" class="footnote" marker="14"/>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152"> (the </ins>
</ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152">market stability reserve</ins>
</ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152">) or cancelled in accordance with Article 12(4) of this Directive.</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152">From 2021 onwards, and without prejudice to a possible reduction pursuant to Article 10a(5a), the share of allowances to be auctioned shall be 57 %.</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152">2 % of the total quantity of allowances between 2021 and 2030 shall be auctioned to establish a fund to improve energy efficiency and modernise the energy systems of certain Member States as set out in Article 10d (</ins>
</ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152"></ins>
</ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152">the Modernisation Fund</ins>
</ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152"></ins>
</ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152">).</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M152 last">The total remaining quantity of allowances to be auctioned by Member States shall be distributed in accordance with paragraph 2.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10-1a">
<num>
<ins class="substitution O004001M014">
<ins class="O008001M002 first">
<noteRef href="#c000012" marker="F12" class="commentary attribute F"/>
1a
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="O008001M002">Where the volume of allowances to be auctioned by Member States in the last year of each period referred to in </ins>
</ins>
<ins class="substitution O004001M014">
<ins class="O008001M002">
<ins class="substitution O010001M134 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Article 13
</ins>
</ins>
</ins>
<ins class="substitution O004001M014">
<ins class="O008001M002 last"> of this Directive exceeds by more than 30 % the expected average auction volume for the first two years of the following period before application of Article 1(5) of Decision (EU) 2015/1814, two thirds of the difference between the volumes shall be deducted from the auction volumes in the last year of the period and added in equal instalments to the volumes to be auctioned by Member States in the first two years of the following period.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10-2">
<num>
<ins class="substitution O004001M014">2</ins>
</num>
<intro>
<p>
<ins class="substitution O004001M014">The total quantity of allowances to be auctioned by each Member State shall be composed as follows:</ins>
</p>
</intro>
<subparagraph eId="d4e1784">
<num>
<ins class="substitution O004001M014">a</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M153 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
90 %
</ins>
</ins>
<ins class="substitution O004001M014"> of the total quantity of allowances to be auctioned being distributed amongst Member States in shares that are identical to the share of verified emissions under the </ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M009 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M014"> for 2005 or the average of the period from 2005 to 2007, whichever one is the highest, of the Member State concerned;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1800">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M154 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
b
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M154 last">10 % of the total quantity of allowances to be auctioned being distributed amongst certain Member States for the purposes of solidarity, growth and interconnections within the Union, thereby increasing the amount of allowances that those Member States auction under point (a) by the percentages specified in Annex IIa.</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1810">
<num>
<ins class="substitution O004001M014">
<del class="O010001M155 first">
<noteRef href="#c000010" marker="F10" class="commentary attribute F"/>
c
</del>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<del class="O010001M155 last">2 % of the total quantity of allowances to be auctioned being distributed amongst Member States the greenhouse gas emissions of which were, in 2005, at least 20 % below their emissions in the base year applicable to them under the Kyoto Protocol. The distribution of this percentage amongst the Member States concerned is set out in Annex IIb.</del>
</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="substitution O004001M014">For the purposes of point (a), in respect of Member States which did not participate in the </ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M010 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M014"> in 2005, their share shall be calculated using their verified emissions under the </ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M010 last">EU ETS</ins>
</ins>
<ins class="substitution O004001M014"> in 2007.</ins>
</p>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M156 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
If necessary, the percentages referred to in point (b) shall be adapted in a proportional manner to ensure that the distribution is 10 %.
</ins>
</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-10-3">
<num>
<ins class="substitution O004001M014">3</ins>
</num>
<intro>
<p>
<ins class="substitution O004001M014">Member States shall determine the use of revenues generated from the auctioning of allowances. At least 50 % of the revenues generated from the auctioning of allowances referred to in paragraph 2, including all revenues from the auctioning referred to in paragraph 2, points (b) and (c), or the equivalent in financial value of these revenues, should be used for one or more of the following:</ins>
</p>
</intro>
<subparagraph eId="d4e1845">
<num>
<ins class="substitution O004001M014">a</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">to reduce greenhouse gas emissions, including by contributing to the Global Energy Efficiency and Renewable Energy Fund and to the Adaptation Fund as made operational by the Poznan Conference on Climate Change (COP 14 and COP/MOP 4), to adapt to the impacts of climate change and to fund research and development as well as demonstration projects for reducing emissions and for adaptation to climate change, including participation in initiatives within the framework of the European Strategic Energy Technology Plan and the European Technology Platforms;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1853">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M157 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
b
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M157 last">to develop renewable energies to meet the commitment of the Union to renewable energies, as well as to develop other technologies that contribute to the transition to a safe and sustainable low-carbon economy, and to help to meet the commitment of the Union to increase energy efficiency, at the levels agreed in relevant legislative acts;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1863">
<num>
<ins class="substitution O004001M014">c</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">measures to avoid deforestation and increase afforestation and reforestation in developing countries that have ratified the international agreement on climate change, to transfer technologies and to facilitate adaptation to the adverse effects of climate change in these countries;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1871">
<num>
<ins class="substitution O004001M014">d</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">forestry sequestration in the </ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M075 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M014">;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1884">
<num>
<ins class="substitution O004001M014">e</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">the environmentally safe capture and geological storage of CO</ins>
<sub>
<ins class="substitution O004001M014">2</ins>
</sub>
<ins class="substitution O004001M014">, in particular from solid fossil fuel power stations and a range of industrial sectors and subsectors, including in third countries;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1897">
<num>
<ins class="substitution O004001M014">f</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">to encourage a shift to low-emission and public forms of transport;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1905">
<num>
<ins class="substitution O004001M014">g</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">to finance research and development in energy efficiency and clean technologies in the sectors covered by this Directive;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1913">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M158 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
h
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M158 last">measures intended to improve energy efficiency, district heating systems and insulation, or to provide financial support in order to address social aspects in lower- and middle-income households;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1923">
<num>
<ins class="substitution O004001M014">i</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">to cover administrative expenses of the management of the </ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M011 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M160 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
;
</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1937">
<num>
<ins class="substitution O004001M014">
<ins class="O010001M159 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
j
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="O010001M159">to finance climate actions in vulnerable third countries, including the adaptation to the impacts of climate change;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1948">
<num>
<ins class="substitution O004001M014">
<ins class="O010001M159">k</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="O010001M159 last">to promote skill formation and reallocation of labour in order to contribute to a just transition to a low carbon economy, in particular in regions most affected by the transition of jobs, in close coordination with the social partners.</ins>
</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="substitution O004001M014">Member States shall be deemed to have fulfilled the provisions of this paragraph if they have in place and implement fiscal or financial support policies, including in particular in developing countries, or domestic regulatory policies, which leverage financial support, established for the purposes set out in the first subparagraph and which have a value equivalent to at least 50 % of the revenues generated from the auctioning of allowances referred to in paragraph 2, including all revenues from the auctioning referred to in paragraph 2, points (b) and (c).</ins>
</p>
<p>
<ins class="substitution O004001M014">Member States shall inform the Commission as to the use of revenues and the actions taken pursuant to this paragraph in their reports submitted under Decision No 280/2004/EC.</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-10-4">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
4
</ins>
</ins>
</num>
<intro>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the timing, administration and other aspects of auctioning, in order to ensure that it is conducted in an open, transparent, harmonised and non-discriminatory manner. To that end, the process shall be predictable, in particular as regards the timing and sequencing of auctions and the estimated volumes of allowances to be made available.</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">Those delegated acts shall ensure that auctions are designed to ensure that:</ins>
</ins>
</p>
</intro>
<subparagraph eId="d4e1978">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">a</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">operators, and in particular any small and medium-sized enterprises covered by the EU ETS, have full, fair and equitable access;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1988">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">b</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">all participants have access to the same information at the same time and that participants do not undermine the operation of the auctions;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e1998">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">c</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">the organisation of, and participation in, the auctions is cost-efficient and undue administrative costs are avoided; and</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e2008">
<num>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161">d</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">
<ins class="substitution O010001M161 last">access to allowances is granted to small emitters.</ins>
</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="substitution O004001M014">Member States shall report on the proper implementation of the auctioning rules for each auction, in particular with respect to fair and open access, transparency, price formation and technical and operational aspects. These reports shall be submitted within one month of the auction concerned and shall be published on the Commission's website.</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-10-5">
<num>
<ins class="substitution O004001M014">5</ins>
</num>
<content>
<p>
<ins class="substitution O004001M014">The Commission shall monitor the functioning of the European carbon market. </ins>
<ins class="substitution O004001M014">
<ins class="substitution O010001M162 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Each year, it shall submit a report to the European Parliament and to the Council on the functioning of the carbon market and on other relevant climate and energy policies, including the operation of the auctions, liquidity and the volumes traded, and summarising the information provided by Member States on the financial measures referred to in Article 10a(6).
</ins>
</ins>
<ins class="substitution O004001M014 last"> If necessary, Member States shall ensure that any relevant information is submitted to the Commission at least two months before the Commission adopts the report.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-10a" period="#period6">
<num>
<ins class="O004001M015">Article 10a</ins>
</num>
<heading>
<ins class="O004001M015 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
Transitional
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M076 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M015">-wide rules for harmonised free allocation</ins>
</heading>
<paragraph eId="article-10a-1">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M163 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
1
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M163 last">The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the Union-wide and fully harmonised rules for the allocation of allowances referred to in paragraphs 4, 5, 7 and 19 of this Article.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">The measures referred to in the first subparagraph shall, to the extent feasible, determine </ins>
<ins class="O004001M015">
<ins class="substitution O010001M078 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M015">-wide ex-ante benchmarks so as to ensure that allocation takes place in a manner that provides incentives for reductions in greenhouse gas emissions and energy efficient techniques, by taking account of the most efficient techniques, substitutes, alternative production processes, high efficiency cogeneration, efficient energy recovery of waste gases, use of biomass and capture and storage of CO</ins>
<sub>
<ins class="O004001M015">2</ins>
</sub>
<ins class="O004001M015">, where such facilities are available, and shall not provide incentives to increase emissions. No free allocation shall be made in respect of any electricity production, except for cases falling within Article 10c and electricity produced from waste gases.</ins>
</p>
<p>
<ins class="O004001M015">For each sector and subsector, in principle, the benchmark shall be calculated for products rather than for inputs, in order to maximise greenhouse gas emissions reductions and energy efficiency savings throughout each production process of the sector or the subsector concerned.</ins>
</p>
<p>
<ins class="O004001M015">In defining the principles for setting ex-ante benchmarks in individual sectors and subsectors, the Commission shall consult the relevant stakeholders, including the sectors and subsectors concerned.</ins>
</p>
<p>
<ins class="O004001M015">The Commission shall, upon the approval by the </ins>
<ins class="O004001M015">
<ins class="substitution O010001M079 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M015"> of an international agreement on climate change leading to mandatory reductions of greenhouse gas emissions comparable to those of the </ins>
<ins class="O004001M015">
<ins class="substitution O010001M079 last">Union</ins>
</ins>
<ins class="O004001M015">, review those measures to provide that free allocation is only to take place where this is fully justified in the light of that agreement.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-2">
<num>
<ins class="O004001M015">2</ins>
</num>
<intro>
<p>
<ins class="O004001M015">In defining the principles for setting ex-ante benchmarks in individual sectors or subsectors, the starting point shall be the average performance of the 10 % most efficient installations in a sector or subsector in the </ins>
<ins class="O004001M015">
<ins class="substitution O010001M080 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M015"> in the years 2007-2008. The Commission shall consult the relevant stakeholders, including the sectors and subsectors concerned.</ins>
</p>
<p>
<ins class="O004001M015">The </ins>
<ins class="O004001M015">
<ins class="substitution O010001M138 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
<ins class="O004001M015"> pursuant to Articles 14 and 15 shall provide for harmonised rules on monitoring, reporting and verification of production-related greenhouse gas emissions with a view to determining the ex-ante benchmarks.</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="O010001M164 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
The Commission shall adopt implementing acts for the purpose of determining the revised benchmark values for free allocation. Those acts shall be in accordance with the delegated acts adopted pursuant to paragraph 1 of this Article and shall comply with the following:
</ins>
</ins>
</p>
</intro>
<subparagraph eId="d4e2122">
<num>
<ins class="O004001M015">
<ins class="O010001M164">a</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="O010001M164">For the period from 2021 to 2025, the benchmark values shall be determined on the basis of information submitted pursuant to Article 11 for the years 2016 and 2017. On the basis of a comparison of those benchmark values with the benchmark values contained in Commission Decision 2011/278/EU</ins>
</ins>
<noteRef href="#f00015" class="footnote" marker="15"/>
<ins class="O004001M015">
<ins class="O010001M164">, as adopted on </ins>
</ins>
<ins class="O004001M015">
<ins class="O010001M164">27 April 2011</ins>
</ins>
<ins class="O004001M015">
<ins class="O010001M164">, the Commission shall determine the annual reduction rate for each benchmark, and shall apply it to the benchmark values applicable in the period from 2013 to 2020 in respect of each year between 2008 and 2023 to determine the benchmark values for the period from 2021 to 2025.</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e2142">
<num>
<ins class="O004001M015">
<ins class="O010001M164">b</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="O010001M164">Where the annual reduction rate exceeds 1,6 % or is below 0,2 %, the benchmark values for the period from 2021 to 2025 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant, in respect of each year between 2008 and 2023.</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e2152">
<num>
<ins class="O004001M015">
<ins class="O010001M164">c</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="O010001M164">For the period from 2026 to 2030, the benchmark values shall be determined in the same manner as set out in points (a) and (b) on the basis of information submitted pursuant to Article 11 for the years 2021 and 2022 and on the basis of applying the annual reduction rate in respect of each year between 2008 and 2028.</ins>
</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="O004001M015">
<ins class="O010001M164">By way of derogation regarding the benchmark values for aromatics, hydrogen and syngas, these benchmark values shall be adjusted by the same percentage as the refineries benchmarks in order to preserve a level playing field for producers of those products.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="O010001M164">The implementing acts referred to in the third subparagraph shall be adopted in accordance with the examination procedure referred to in Article 22a(2).</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="O010001M164 last">In order to promote efficient energy recovery from waste gases, for the period referred to in point (b) of the third subparagraph, the benchmark value for hot metal, which predominantly relates to waste gases, shall be updated with an annual reduction rate of 0,2 %.</ins>
</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-10a-3">
<num>
<ins class="O004001M015">3</ins>
</num>
<content>
<p>
<ins class="O004001M015">Subject to paragraphs 4 and 8, and notwithstanding Article 10c, no free allocation shall be given to electricity generators, to installations for the capture of CO</ins>
<sub>
<ins class="O004001M015">2</ins>
</sub>
<ins class="O004001M015">, to pipelines for transport of CO</ins>
<sub>
<ins class="O004001M015">2</ins>
</sub>
<ins class="O004001M015"> or to CO</ins>
<sub>
<ins class="O004001M015">2</ins>
</sub>
<ins class="O004001M015"> storage sites.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-4">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M165 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
4
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M165">Free allocation shall be given to district heating as well as to high efficiency cogeneration, as defined by Directive 2012/27/EU of the European Parliament and of the Council</ins>
</ins>
<noteRef href="#f00016" class="footnote" marker="16"/>
<ins class="O004001M015">
<ins class="substitution O010001M165 last">, for economically justifiable demand, in respect of the production of heating or cooling. In each year subsequent to 2013, the total allocation to such installations in respect of the production of that heat shall be adjusted by the linear factor referred to in Article 9 of this Directive, except for any year in which those allocations are adjusted in a uniform manner pursuant to paragraph 5 of this Article.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-5">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M166 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
5
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M166 last">In order to respect the auctioning share set out in Article 10, for every year in which the sum of free allocations does not reach the maximum amount that respects the auctioning share, the remaining allowances up to that amount shall be used to prevent or limit reduction of free allocations to respect the auctioning share in later years. Where, nonetheless, the maximum amount is reached, free allocations shall be adjusted accordingly. Any such adjustment shall be done in a uniform manner.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-5a">
<num>
<ins class="O004001M015">
<ins class="O010001M167 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
5a
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="O010001M167">By way of derogation from paragraph 5, an additional amount of up to 3 % of the total quantity of allowances shall, to the extent necessary, be used to increase the maximum amount available under paragraph 5.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-5b">
<num>
<ins class="O004001M015">
<ins class="O010001M167">5b</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="O010001M167">Where less than 3 % of the total quantity of allowances is needed to increase the maximum amount available under paragraph 5:</ins>
</ins>
</p>
<blockList class="unordered">
<item>
<p>
<ins class="O004001M015">
<ins class="O010001M167">a maximum of 50 million allowances shall be used to increase the amount of allowances available to support innovation in accordance with Article 10a(8); and</ins>
</ins>
</p>
</item>
<item>
<p>
<ins class="O004001M015">
<ins class="O010001M167 last">a maximum of 0,5 % of the total quantity of allowances shall be used to increase the amount of allowances available to modernise the energy systems of certain Member States in accordance with Article 10d.</ins>
</ins>
</p>
</item>
</blockList>
</content>
</paragraph>
<paragraph eId="article-10a-6">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M168 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
6
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M168">Member States should adopt financial measures in accordance with the second and fourth subparagraphs in favour of sectors or subsectors which are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred from greenhouse gas emission costs passed on in electricity prices, provided that such financial measures are in accordance with State aid rules, and in particular do not cause undue distortions of competition in the internal market. Where the amount available for such financial measures exceeds 25 % of the revenues generated from the auctioning of allowances, the Member State concerned shall set out the reasons for exceeding that amount.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M168">Member States shall also seek to use no more than 25 % of the revenues generated from the auctioning of allowances for the financial measures referred to in the first subparagraph. Within three months of the end of each year, Member States that have such financial measures in place shall make available to the public, in an easily accessible form, the total amount of compensation provided per benefitting sector and subsector. As from 2018, in any year in which a Member State uses more than 25 % of the revenues generated from the auctioning of allowances for such purposes, it shall publish a report setting out the reasons for exceeding that amount. The report shall include relevant information on electricity prices for large industrial consumers benefiting from such financial measures, without prejudice to requirements regarding the protection of confidential information. The report shall also include information on whether due consideration has been given to other measures to sustainably lower indirect carbon costs in the medium to long term.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M168">The Commission shall include in the report provided for in Article 10(5), </ins>
</ins>
<em>
<ins class="O004001M015">
<ins class="substitution O010001M168">inter alia</ins>
</ins>
</em>
<ins class="O004001M015">
<ins class="substitution O010001M168">, an assessment of the effects of such financial measures on the internal market and, where appropriate, recommend any measures that may be necessary pursuant to that assessment.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M168">Those measures shall be such as to ensure that there is adequate protection against the risk of carbon leakage, based on </ins>
</ins>
<em>
<ins class="O004001M015">
<ins class="substitution O010001M168">ex-ante</ins>
</ins>
</em>
<ins class="O004001M015">
<ins class="substitution O010001M168"> benchmarks for the indirect emissions of CO</ins>
</ins>
<sub>
<ins class="O004001M015">
<ins class="substitution O010001M168">2</ins>
</ins>
</sub>
<ins class="O004001M015">
<ins class="substitution O010001M168"> per unit of production. Those </ins>
</ins>
<em>
<ins class="O004001M015">
<ins class="substitution O010001M168">ex-ante</ins>
</ins>
</em>
<ins class="O004001M015">
<ins class="substitution O010001M168"> benchmarks shall be calculated for a given sector or subsector as the product of the electricity consumption per unit of production corresponding to the most efficient available technologies and of the CO</ins>
</ins>
<sub>
<ins class="O004001M015">
<ins class="substitution O010001M168">2</ins>
</ins>
</sub>
<ins class="O004001M015">
<ins class="substitution O010001M168 last"> emissions of the relevant European electricity production mix.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-7">
<num>
<ins class="O004001M015">7</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M169 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Allowances from the maximum amount referred to in paragraph 5 of this Article which were not allocated for free by 2020 shall be set aside for new entrants, together with 200 million allowances placed in the market stability reserve pursuant to Article 1(3) of Decision (EU) 2015/1814. Of the allowances set aside, up to 200 million shall be returned to the market stability reserve at the end of the period from 2021 to 2030 if not allocated for that period.
</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M169 last">From 2021, allowances that pursuant to paragraphs 19 and 20 are not allocated to installations shall be added to the amount of allowances set aside in accordance with the first sentence of the first subparagraph of this paragraph.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">Allocations shall be adjusted by the linear factor referred to in Article 9.</ins>
</p>
<p>
<ins class="O004001M015">No free allocation shall be made in respect of any electricity production by new entrants.</ins>
</p>
<p>
<del class="O010001M170000 first">
<noteRef href="#c000010" marker="F10" class="commentary F"/>
. . . . .
</del>
</p>
<p>
<del class="O010001M170000 last">
<noteRef href="#c000010" marker="F10" class="commentary F"/>
. . . . .
</del>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-8">
<num>
<ins class="O004001M015">8</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M171 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
325 million allowances from the quantity which could otherwise be allocated for free pursuant to this Article, and 75 million allowances from the quantity which could otherwise be auctioned pursuant to Article 10, shall be made available to support innovation in low-carbon technologies and processes in sectors listed in Annex I, including environmentally safe carbon capture and utilisation (
</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M171">CCU</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M171">) that contributes substantially to mitigating climate change, as well as products substituting carbon intensive ones produced in sectors listed in Annex I, and to help stimulate the construction and operation of projects that aim at the environmentally safe capture and geological storage (</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M171">CCS</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M171">) of CO</ins>
</ins>
<sub>
<ins class="O004001M015">
<ins class="substitution O010001M171">2</ins>
</ins>
</sub>
<ins class="O004001M015">
<ins class="substitution O010001M171">, as well as of innovative renewable energy and energy storage technologies; in geographically balanced locations within the territory of the Union (the </ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M171">innovation fund</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M171">). Projects in all Member States, including small-scale projects, shall be eligible.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M171">In addition, 50 million unallocated allowances from the market stability reserve shall supplement any remaining revenues from the 300 million allowances available in the period from 2013 to 2020 under Commission Decision 2010/670/EU</ins>
</ins>
<noteRef href="#f00017" class="footnote" marker="17"/>
<ins class="O004001M015">
<ins class="substitution O010001M171">, and shall be used in a timely manner for innovation support as referred to in the first subparagraph.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M171">Projects shall be selected on the basis of objective and transparent criteria, taking into account, where relevant, the extent to which projects contribute to achieving emission reductions well below the benchmarks referred to in paragraph 2. Projects shall have the potential for widespread application or to significantly lower the costs of transitioning towards a low-carbon economy in the sectors concerned. Projects involving CCU shall deliver a net reduction in emissions and ensure avoidance or permanent storage of CO</ins>
</ins>
<sub>
<ins class="O004001M015">
<ins class="substitution O010001M171">2</ins>
</ins>
</sub>
<ins class="O004001M015">
<ins class="substitution O010001M171">. Technologies receiving support shall not yet be commercially available but shall represent breakthrough solutions or be sufficiently mature to be ready for demonstration at pre-commercial scale. Up to 60 % of the relevant costs of projects may be supported, out of which up to 40 % need not be dependent on verified avoidance of greenhouse gas emissions, provided that pre-determined milestones, taking into account the technology deployed, are attained.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M171 last">The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning rules on the operation of the innovation fund, including the selection procedure and criteria.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">Allowances shall be set aside for the projects that meet the criteria referred to in the third subparagraph. Support for these projects shall be given via Member States and shall be complementary to substantial co-financing by the operator of the installation. They could also be co-financed by the Member State concerned, as well as by other instruments. No project shall receive support via the mechanism under this paragraph that exceeds 15 % of the total number of allowances available for this purpose. These allowances shall be taken into account under paragraph 7.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-9">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M172 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
9
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M172">Greece, which had a gross domestic product (GDP) per capita at market prices below 60 % of the Union average in 2014, may claim, prior to the application of paragraph 7 of this Article, up to 25 million allowances from the maximum amount referred to in paragraph 5 of this Article which are not allocated for free by </ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M172">31 December 2020</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M172">, for the co-financing of up to 60 % of the decarbonisation of the electricity supply of islands within its territory. Article 10d(3) shall apply </ins>
</ins>
<em>
<ins class="O004001M015">
<ins class="substitution O010001M172">mutatis mutandis</ins>
</ins>
</em>
<ins class="O004001M015">
<ins class="substitution O010001M172 last"> to such allowances. Allowances may be claimed where, due to restricted access to the international debt markets, a project aiming at the decarbonisation of the electricity supply of Greece's islands could otherwise not be realised and where the European Investment Bank (EIB) confirms the financial viability and socio-economic benefits of the project.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-10">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
10
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-10a-11">
<num>
<ins class="O004001M015">11</ins>
</num>
<content>
<p>
<ins class="O004001M015">Subject to Article 10b, the amount of allowances allocated free of charge under paragraphs 4 to 7 of this Article in 2013 shall be 80 % of the quantity determined in accordance with the measures referred to in paragraph 1. Thereafter the free allocation shall decrease each year by equal amounts resulting in 30 % free allocation in 2020 </ins>
<ins class="O004001M015">
<del class="O010001M174 first last">
<noteRef href="#c000010" marker="F10" class="commentary attribute F"/>
, with a view to reaching no free allocation in 2027
</del>
</ins>
<ins class="O004001M015">.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-12">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
12
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-10a-13">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
13
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-10a-14">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
14
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-10a-15">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
15
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-10a-16">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
16
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-10a-17">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
17
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-10a-18">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
18
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-10a-19">
<num>
<ins class="O004001M015">19</ins>
</num>
<content>
<p>
<ins class="O004001M015">No free allocation shall be given to an installation that has ceased its operations, unless the operator demonstrates to the competent authority that this installation will resume production within a specified and reasonable time. Installations for which the greenhouse gas emissions permit has expired or has been withdrawn and installations for which the operation or resumption of operation is technically impossible shall be considered to have ceased operations.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-20">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M176 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
20
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M176 last">The level of free allocations given to installations whose operations have increased or decreased, as assessed on the basis of a rolling average of two years, by more than 15 % compared to the level initially used to determine the free allocation for the relevant period referred to in Article 11(1) shall, as appropriate, be adjusted. Such adjustments shall be carried out with allowances from, or by adding allowances to, the amount of allowances set aside in accordance with paragraph 7 of this Article.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10a-21">
<num>
<ins class="O004001M015">
<ins class="O010001M177 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
21
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="O010001M177 last">In order to ensure the effective, non-discriminatory and uniform application of the adjustments and threshold referred to in paragraph 20 of this Article, to avoid any undue administrative burden, and to prevent manipulation or abuse of the adjustments to the allocation, the Commission may adopt implementing acts which define further arrangements for the adjustments. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).</ins>
</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-10b" period="#period6">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">Article 10b</ins>
</ins>
</num>
<heading>
<ins class="O004001M015">
<ins class="substitution O010001M178 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Transitional measures to support certain energy intensive industries in the event of carbon leakage
</ins>
</ins>
</heading>
<paragraph eId="article-10b-1">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">1</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Sectors and subsectors in relation to which the product resulting from multiplying their intensity of trade with third countries, defined as the ratio between the total value of exports to third countries plus the value of imports from third countries and the total market size for the European Economic Area (annual turnover plus total imports from third countries), by their emission intensity, measured in kgCO</ins>
</ins>
<sub>
<ins class="O004001M015">
<ins class="substitution O010001M178">2</ins>
</ins>
</sub>
<ins class="O004001M015">
<ins class="substitution O010001M178">, divided by their gross value added (in euros), exceeds 0,2, shall be deemed to be at risk of carbon leakage. Such sectors and subsectors shall be allocated allowances free of charge for the period until 2030 at 100 % of the quantity determined pursuant to Article 10a.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10b-2">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">2</ins>
</ins>
</num>
<intro>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Sectors and subsectors in relation to which the product resulting from multiplying their intensity of trade with third countries by their emission intensity exceeds 0,15 may be included in the group referred to in paragraph 1, using data for the years from 2014 to 2016, on the basis of a qualitative assessment and of the following criteria:</ins>
</ins>
</p>
</intro>
<subparagraph eId="d4e2581">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">a</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">the extent to which it is possible for individual installations in the sector or subsector concerned to reduce emission levels or electricity consumption;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e2591">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">b</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">current and projected market characteristics, including, where relevant, any common reference price;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e2601">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">c</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">profit margins as a potential indicator of long-run investment or relocation decisions, taking into account changes in costs of production relating to emission reductions.</ins>
</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-10b-3">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">3</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Sectors and subsectors that do not exceed the threshold referred to in paragraph 1, but have an emission intensity measured in kgCO</ins>
</ins>
<sub>
<ins class="O004001M015">
<ins class="substitution O010001M178">2</ins>
</ins>
</sub>
<ins class="O004001M015">
<ins class="substitution O010001M178">, divided by their gross value added (in euros), which exceeds 1,5, shall also be assessed at a 4-digit level (NACE-4 code). The Commission shall make the results of that assessment public.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Within three months of the publication referred to in the first subparagraph, the sectors and subsectors referred to in that subparagraph may apply to the Commission for either a qualitative assessment of their carbon leakage exposure at a 4-digit level (NACE-4 code) or an assessment on the basis of the classification of goods used for statistics on industrial production in the Union at an 8-digit level (Prodcom). To that end, sectors and subsectors shall submit duly substantiated, complete and independently verified data to enable the Commission to carry out the assessment together with the application.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Where a sector or subsector chooses to be assessed at a 4-digit level (NACE-4 code), it may be included in the group referred to in paragraph 1 on the basis of the criteria referred to in points (a), (b) and (c) of paragraph 2. Where a sector or subsector chooses to be assessed at an 8-digit level (Prodcom), it shall be included in the group referred to in paragraph 1 provided that, at that level, the threshold of 0,2 referred to in paragraph 1 is exceeded.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Sectors and subsectors for which free allocation is calculated on the basis of the benchmark values referred to in the fourth subparagraph of Article 10a(2) may also request to be assessed in accordance with the third subparagraph of this paragraph.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">By way of derogation from paragraphs 1 and 2, a Member State may request, by </ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">30 June 2018</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">, that a sector or subsector listed in the Annex to Commission Decision 2014/746/EU</ins>
</ins>
<noteRef href="#f00018" class="footnote" marker="18"/>
<ins class="O004001M015">
<ins class="substitution O010001M178"> in respect of classifications at a 6-digit or an 8-digit level (Prodcom) be considered to be included in the group referred to in paragraph 1. Any such request shall only be considered where the requesting Member State establishes that the application of that derogation is justified on the basis of duly substantiated, complete, verified and audited data for the five most recent years provided by the sector or subsector concerned, and includes all relevant information with its request. On the basis of those data, the sector or subsector concerned shall be included in respect of those classifications where, within a heterogeneous 4-digit level (NACE-4 code), it is shown that it has a substantially higher trade and emission intensity at a 6-digit or an 8-digit level (Prodcom), exceeding the threshold set out in paragraph 1.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10b-4">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">4</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Other sectors and subsectors are considered to be able to pass on more of the costs of allowances in product prices, and shall be allocated allowances free of charge at 30 % of the quantity determined pursuant to Article 10a. Unless otherwise decided in the review pursuant to Article 30, free allocations to other sectors and subsectors, except district heating, shall decrease by equal amounts after 2026 so as to reach a level of no free allocation in 2030.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10b-5">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">5</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">The Commission is empowered to adopt, by </ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">31 December 2019</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">, delegated acts in accordance with Article 23 to supplement this Directive concerning the determination of sectors and subsectors deemed at risk of carbon leakage, as referred to in paragraphs 1, 2 and 3 of this Article, for activities at a 4-digit level (NACE-4 code) as far as paragraph 1 of this Article is concerned, based on data for the three most recent calendar years available.</ins>
</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-10c" period="#period6">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">Article 10c</ins>
</ins>
</num>
<heading>
<ins class="O004001M015">
<ins class="substitution O010001M178">Option for transitional free allocation for the modernisation of the energy sector</ins>
</ins>
</heading>
<paragraph eId="article-10c-1">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">1</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">By way of derogation from Article 10a(1) to (5), Member States which had in 2013 a GDP per capita at market prices (in euros) below 60 % of the Union average may give a transitional free allocation to installations for electricity generation for the modernisation, diversification and sustainable transformation of the energy sector. The investments supported shall be consistent with the transition to a safe and sustainable low-carbon economy, the objectives of the Union's 2030 climate and energy policy framework, and reaching the long-term objectives expressed in the Paris Agreement. The derogation provided for in this paragraph shall end on </ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">31 December 2030</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10c-2">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">2</ins>
</ins>
</num>
<intro>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">The Member State concerned shall organise a competitive bidding process, to take place in one or more rounds between 2021 and 2030, for projects involving a total amount of investment exceeding EUR 12,5 million, in order to select the investments to be financed with free allocation. That competitive bidding process shall:</ins>
</ins>
</p>
</intro>
<subparagraph eId="d4e2721">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">a</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">comply with the principles of transparency, non-discrimination, equal treatment and sound financial management;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e2731">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">b</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">ensure that only projects which contribute to the diversification of their energy mix and sources of supply, the necessary restructuring, environmental upgrading and retrofitting of the infrastructure, clean technologies, such as renewable energy technologies, or modernisation of the energy production sector, such as efficient and sustainable district heating, and of the transmission and distribution sector, are eligible to bid;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e2741">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">c</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">define clear, objective, transparent and non-discriminatory selection criteria for the ranking of projects, so as to ensure that only projects are selected which:</ins>
</ins>
</p>
<blockList class="ordered">
<item>
<num>(i)</num>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">on the basis of a cost-benefit analysis, ensure a net positive gain in terms of emission reduction and realise a pre-determined significant level of CO</ins>
</ins>
<sub>
<ins class="O004001M015">
<ins class="substitution O010001M178">2</ins>
</ins>
</sub>
<ins class="O004001M015">
<ins class="substitution O010001M178"> reductions taking into account the size of the project;</ins>
</ins>
</p>
</item>
<item>
<num>(ii)</num>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">are additional, clearly respond to replacement and modernisation needs and do not supply a market-driven increase in energy demand;</ins>
</ins>
</p>
</item>
<item>
<num>(iii)</num>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">offer the best value for money; and</ins>
</ins>
</p>
</item>
<item>
<num>(iv)</num>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">do not contribute to or improve the financial viability of highly emission-intensive electricity generation or increase dependency on emission-intensive fossil fuels.</ins>
</ins>
</p>
</item>
</blockList>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">By way of derogation from Article 10(1) and without prejudice to the last sentence of paragraph 1 of this Article, in the event that an investment selected through the competitive bidding process is cancelled or the intended performance is not reached, the earmarked allowances may be used through a single additional round of the competitive bidding process at the earliest one year thereafter to finance other investments.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">By </ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">30 June 2019</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">, any Member State intending to make use of optional transitional free allocation for the modernisation of the energy sector shall publish a detailed national framework setting out the competitive bidding process, including the planned number of rounds referred to in the first subparagraph, and the selection criteria, for public comment.</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Where investments with a value of less than EUR 12,5 million are to be supported with free allocation and are not selected through the competitive bidding process referred to in this paragraph, the Member State shall select projects based on objective and transparent criteria. The results of this selection process shall be published for public comment. On this basis, the Member State concerned shall, by </ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">30 June 2019</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">, establish, publish and submit to the Commission a list of investments. Where more than one investment is carried out within the same installation, they shall be assessed as a whole to establish whether or not the value threshold of EUR 12,5 million is exceeded, unless those investments are, independently, technically or financially viable.</ins>
</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-10c-3">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">3</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">The value of the intended investments shall at least equal the market value of the free allocation, while taking into account the need to limit directly linked price increases. The market value shall be the average of the price of allowances on the common auction platform in the preceding calendar year. Up to 70 % of the relevant costs of an investment may be supported using the free allocation, provided that the remaining costs are financed by private legal entities.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10c-4">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">4</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Transitional free allocations shall be deducted from the quantity of allowances that the Member State would otherwise auction. The total free allocation shall be no more than 40 % of the allowances which the Member State concerned will receive, pursuant to Article 10(2)(a), in the period from 2021 to 2030, spread out in equal annual volumes over that period.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10c-5">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">5</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Where a Member State, pursuant to Article 10d(4), uses allowances distributed for the purposes of solidarity, growth and interconnections within the Union in accordance with Article 10(2)(b), that Member State may, by way of derogation from paragraph 4 of this Article, use for transitional free allocation a total quantity of up to 60 % of the allowances received in the period from 2021 to 2030 pursuant to Article 10(2)(a), using a corresponding amount of the allowances distributed in accordance with Article 10(2)(b).</ins>
</ins>
</p>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Any allowances not allocated under this Article by 2020 may be allocated over the period from 2021 to 2030 to investments selected through the competitive bidding process referred to in paragraph 2, unless the Member State concerned informs the Commission by </ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178">30 September 2019</ins>
</ins>
<ins class="O004001M015">
<ins class="substitution O010001M178"> of its intention not to allocate some or all of those allowances over the period from 2021 to 2030, and of the amount of allowances to be auctioned instead in 2020. Where such allowances are allocated over the period from 2021 to 2030, a corresponding amount of allowances shall be taken into account for the application of the 60 % limit set out in the first subparagraph of this paragraph.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10c-6">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">6</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015">
<ins class="substitution O010001M178">Allocations to operators shall be made upon demonstration that an investment selected in accordance with the rules of the competitive bidding process has been carried out. Where an investment leads to additional electricity generation capacity, the operator concerned shall also demonstrate that a corresponding amount of electricity-generation capacity with higher emission intensity has been decommissioned by it or another associated operator by the start of operation of the additional capacity.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10c-7">
<num>
<ins class="O004001M015">
<ins class="substitution O010001M178">7</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M015 last">
<ins class="substitution O010001M178 last">Member States shall require benefiting electricity generators and network operators to report, by 28 February of each year, on the implementation of their selected investments, including the balance of free allocation and investment expenditure incurred and the types of investments supported. Member States shall report on this to the Commission, and the Commission shall make such reports public.</ins>
</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-10d" period="#period6">
<num>
<ins class="O010001M179">Article 10d</ins>
</num>
<heading>
<ins class="O010001M179 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
Modernisation Fund
</ins>
</heading>
<paragraph eId="article-10d-1">
<num>
<ins class="O010001M179">1</ins>
</num>
<content>
<p>
<ins class="O010001M179">A fund to support investments proposed by the beneficiary Member States, including the financing of small-scale investment projects, to modernise energy systems and improve energy efficiency, in Member States with a GDP per capita at market prices below 60 % of the Union average in 2013 (the </ins>
<ins class="O010001M179"></ins>
<ins class="O010001M179">Modernisation Fund</ins>
<ins class="O010001M179"></ins>
<ins class="O010001M179">), shall be established for the period from 2021 to 2030. The Modernisation Fund shall be financed through the auctioning of allowances as set out in Article 10.</ins>
</p>
<p>
<ins class="O010001M179">The investments supported shall be consistent with the aims of this Directive, as well as the objectives of the Union's 2030 climate and energy policy framework and the long-term objectives as expressed in the Paris Agreement. No support from the Modernisation Fund shall be</ins>
<ins class="O010001M179"> provided to energy generation facilities that use solid fossil fuels, other than efficient and sustainable district heating in Member States with a GDP per capita at market prices below 30 % of the Union average in 2013, provided that an amount of allowances of at least an equivalent value is used for investments under Article 10c that do not involve solid fossil fuels.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-2">
<num>
<ins class="O010001M179">2</ins>
</num>
<content>
<p>
<ins class="O010001M179">At least 70 % of the financial resources from the Modernisation Fund shall be used to support investments in the generation and use of electricity from renewable sources, the improvement of energy efficiency, except energy efficiency relating to energy generation using solid fossil fuels, energy storage and the modernisation of energy networks, including district heating pipelines, grids for electricity transmission and the increase of interconnections between Member States, as well as to support a just transition in carbon-dependent regions in the beneficiary Member States, so as to support the redeployment, re-skilling and up-skilling of workers, education, job-seeking initiatives and start-ups, in dialogue with the social partners. Investments in energy efficiency in transport, buildings, agriculture and waste shall also be eligible.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-3">
<num>
<ins class="O010001M179">3</ins>
</num>
<content>
<p>
<ins class="O010001M179">The Modernisation Fund shall operate under the responsibility of the beneficiary Member States. The EIB shall ensure that the allowances are auctioned in accordance with the principles and modalities laid down in Article 10(4), and shall be responsible for managing the revenues. The EIB shall pass on the revenues to the Member States upon a disbursement decision from the Commission, where this disbursement for investments is in line with paragraph 2 of this Article or, where the investments do not fall into the areas listed in paragraph 2 of this Article, is in line with the recommendations of the investment committee. The Commission shall adopt its decision in a timely manner. The revenues shall be distributed amongst the Member States and according to the shares set out in Annex IIb, in accordance with paragraphs 6 to 12 of this Article.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-4">
<num>
<ins class="O010001M179">4</ins>
</num>
<content>
<p>
<ins class="O010001M179">Any Member State concerned may use the total free allocation granted pursuant to Article 10c(4), or part of that allocation, and the amount of allowances distributed for the purposes of solidarity, growth and interconnections within the Union in accordance with Article 10(2)(b), or part of that amount, in accordance with Article 10d, to support investments within the framework of the Modernisation Fund, thereby increasing the resources distributed to that Member State. By </ins>
<ins class="O010001M179">30 September 2019</ins>
<ins class="O010001M179">, the Member State concerned shall notify the Commission of the respective amounts of allowances to be used under Article 10(2)(b), Article 10c and Article 10d.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-5">
<num>
<ins class="O010001M179">5</ins>
</num>
<content>
<p>
<ins class="O010001M179">An investment committee for the Modernisation Fund is hereby established. The investment committee shall be composed of a representative from each beneficiary Member State, the Commission and the EIB, and three representatives elected by the other Member States for a period of five years. It shall be chaired by the representative of the Commission. One representative of each Member State that is not a member of the investment committee may attend meetings of the committee as an observer.</ins>
</p>
<p>
<ins class="O010001M179">The investment committee shall operate in a transparent manner. The composition of the investment committee and the curricula vitae and declarations of interests of its members shall be made available to the public and, where necessary, updated.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-6">
<num>
<ins class="O010001M179">6</ins>
</num>
<content>
<p>
<ins class="O010001M179">Before a beneficiary Member State decides to finance an investment from its share in the Modernisation Fund, it shall present the investment project to the investment committee and to the EIB. Where the EIB confirms that an investment falls into the areas listed in paragraph 2, the Member State may proceed to finance the investment project from its share.</ins>
</p>
<p>
<ins class="O010001M179">Where an investment in the modernisation of energy systems, which is proposed to be financed from the Modernisation Fund, does not fall into the areas listed in paragraph 2, the investment committee shall assess the technical and financial viability of that investment, including the emission reductions it achieves, and issue a recommendation on financing the investment from the Modernisation Fund. The investment committee shall ensure that any investment relating to district heating achieves a substantial improvement in energy efficiency and emission reductions. That recommendation may include suggestions regarding appropriate financing instruments. Up to 70 % of the relevant costs of an investment which does not fall into the areas listed in paragraph 2 may be supported with resources from the Modernisation Fund provided that the remaining costs are financed by private legal entities.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-7">
<num>
<ins class="O010001M179">7</ins>
</num>
<content>
<p>
<ins class="O010001M179">The investment committee shall strive to adopt its recommendations by consensus. If the investment committee is not able to decide by consensus within a deadline set by the chairman, it shall take a decision by simple majority.</ins>
</p>
<p>
<ins class="O010001M179">If the representative of the EIB does not endorse financing an investment, a recommendation shall only be adopted if a majority of two-thirds of all members vote in favour. The representative of the Member State in which the investment is to take place and the representative of the EIB shall not be entitled to cast a vote in this case. This subparagraph shall not apply to small-scale projects funded through loans provided by a national promotional bank or through grants contributing to the implementation of a national programme serving specific objectives in line with the objectives of the Modernisation Fund, provided that not more than 10 % of the Member States' share set out in Annex IIb is used under the programme.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-8">
<num>
<ins class="O010001M179">8</ins>
</num>
<content>
<p>
<ins class="O010001M179">Any acts or recommendations by the EIB or the investment committee made pursuant to paragraphs 6 and 7 shall be made in a timely manner and state the reasons on which they are based. Such acts and recommendations shall be made public.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-9">
<num>
<ins class="O010001M179">9</ins>
</num>
<content>
<p>
<ins class="O010001M179">The beneficiary Member States shall be responsible for following up on the implementation with respect to selected projects.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-10">
<num>
<ins class="O010001M179">10</ins>
</num>
<intro>
<p>
<ins class="O010001M179">The beneficiary Member States shall report annually to the Commission on investments financed by the Modernisation Fund. The report shall be made public and include:</ins>
</p>
</intro>
<subparagraph eId="d4e2991">
<num>
<ins class="O010001M179">a</ins>
</num>
<content>
<p>
<ins class="O010001M179">information on the investments financed per beneficiary Member State;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e2999">
<num>
<ins class="O010001M179">b</ins>
</num>
<content>
<p>
<ins class="O010001M179">an assessment of the added value, in terms of energy efficiency or modernisation of the energy system, achieved through the investment.</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-10d-11">
<num>
<ins class="O010001M179">11</ins>
</num>
<content>
<p>
<ins class="O010001M179">The investment committee shall report annually to the Commission on experience with the evaluation of investments. By </ins>
<ins class="O010001M179">31 December 2024</ins>
<ins class="O010001M179">, taking into consideration the findings of the investment committee, the Commission shall review the areas for projects referred to in paragraph 2 and the basis on which the investment committee bases its recommendations.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-10d-12">
<num>
<ins class="O010001M179">12</ins>
</num>
<content>
<p>
<ins class="O010001M179 last">The Commission shall adopt implementing acts concerning detailed rules on the operation of the Modernisation Fund. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-11" period="#period6">
<num>
<ins class="substitution O004001M016">Article 11</ins>
</num>
<heading>
<ins class="substitution O004001M016 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
National implementation measures
</ins>
</heading>
<paragraph eId="article-11-1">
<num>
<ins class="substitution O004001M016">1</ins>
</num>
<content>
<p>
<ins class="substitution O004001M016">Each Member State shall publish and submit to the Commission, by </ins>
<ins class="substitution O004001M016">30 September 2011</ins>
<ins class="substitution O004001M016">, the list of installations covered by this Directive in its territory and any free allocation to each installation in its territory calculated in accordance with the rules referred to in Article 10a(1) and Article 10c.</ins>
</p>
<p>
<ins class="substitution O004001M016">
<ins class="O010001M180 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
A list of installations covered by this Directive for the five years beginning on
</ins>
</ins>
<ins class="substitution O004001M016">
<ins class="O010001M180">1 January 2021</ins>
</ins>
<ins class="substitution O004001M016">
<ins class="O010001M180"> shall be submitted by </ins>
</ins>
<ins class="substitution O004001M016">
<ins class="O010001M180">30 September 2019</ins>
</ins>
<ins class="substitution O004001M016">
<ins class="O010001M180 last">, and lists for each subsequent period of five years shall be submitted every five years thereafter. Each list shall include information on production activity, transfers of heat and gases, electricity production and emissions at sub-installation level over the five calendar years preceding its submission. Free allocations shall only be given to installations where such information is provided.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11-2">
<num>
<ins class="substitution O004001M016">2</ins>
</num>
<content>
<p>
<ins class="substitution O004001M016">By 28 February of each year, the competent authorities shall issue the quantity of allowances that are to be allocated for that year, calculated in accordance with Articles 10, 10a and 10c.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11-3">
<num>
<ins class="substitution O004001M016">3</ins>
</num>
<content>
<p>
<ins class="substitution O004001M016 last">Member States may not issue allowances free of charge under paragraph 2 to installations whose inscription in the list referred to in paragraph 1 has been rejected by the Commission.</ins>
</p>
</content>
</paragraph>
</article>
</chapter>
<chapter eId="chapter-IV" period="#period6">
<num>
<ins class="O002001M008 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
CHAPTER IV
</ins>
</num>
<heading>
<ins class="O002001M008 last">PROVISIONS APPLYING TO AVIATION AND STATIONARY INSTALLATIONS</ins>
</heading>
<article eId="article-11a" period="#period6">
<num>
<ins class="O001001M003">
<ins class="substitution O004001M017">Article 11a</ins>
</ins>
</num>
<heading>
<ins class="O001001M003 first">
<noteRef href="#c000007" marker="F7" class="commentary attribute F"/>
<ins class="substitution O004001M017 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
Use of CERs and ERUs from project activities in the
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M019 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> before the entry into force of an international agreement on climate change</ins>
</ins>
</heading>
<paragraph eId="article-11a-1">
<num>
<ins class="O001001M003">
<ins class="substitution O004001M017">1</ins>
</ins>
</num>
<content>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">Without prejudice to the application of Article 28(3) and (4), paragraphs 2 to 7 of this Article shall apply.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11a-2">
<num>
<ins class="O001001M003">
<ins class="substitution O004001M017">2</ins>
</ins>
</num>
<content>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> granted under paragraph 8, operators may request the competent authority to issue allowances to them valid from 2013 onwards in exchange for CERs and ERUs issued in respect of emission reductions up until 2012 from project types which were eligible for use in the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M020 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> during the period from 2008 to 2012.</ins>
</ins>
</p>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">Until </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">31 March 2015</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">, the competent authority shall make such an exchange on request.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11a-3">
<num>
<ins class="O001001M003">
<ins class="substitution O004001M017">3</ins>
</ins>
</num>
<content>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8, competent authorities shall allow operators to exchange CERs and ERUs from projects that were registered before 2013 issued in respect of emission reductions from 2013 onwards for allowances valid from 2013 onwards.</ins>
</ins>
</p>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">The first subparagraph shall apply to CERs and ERUs for all project types which were eligible for use in the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M021 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> during the period from 2008 to 2012.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11a-4">
<num>
<ins class="O001001M003">
<ins class="substitution O004001M017">4</ins>
</ins>
</num>
<content>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8, competent authorities shall allow operators to exchange CERs issued in respect of emission reductions from 2013 onwards for allowances from new projects started from 2013 onwards in LDCs.</ins>
</ins>
</p>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">The first subparagraph shall apply to CERs for all project types which were eligible for use in the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M022 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> during the period from 2008 to 2012, until those countries have ratified a relevant agreement with the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M089 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> or until 2020, whichever is the earlier.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11a-5">
<num>
<ins class="O001001M003">
<ins class="substitution O004001M017">5</ins>
</ins>
</num>
<content>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">To the extent that the levels of CER and ERU use, allowed to operators or aircraft operators by Member States for the period from 2008 to 2012, have not been used up or an entitlement to use credits is granted under paragraph 8 and in the event that the negotiations on an international agreement on climate change are not concluded by </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">31 December 2009</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">, credits from projects or other emission reducing activities may be used in the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M023 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> in accordance with agreements concluded with third countries, specifying levels of use. In accordance with such agreements, operators shall be able to use credits from project activities in those third countries to comply with their obligations under the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M023 last">EU ETS</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11a-6">
<num>
<ins class="O001001M003">
<ins class="substitution O004001M017">6</ins>
</ins>
</num>
<content>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">Any agreements referred to in paragraph 5 shall provide for the use of credits in the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M024 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> from project types which were eligible for use in the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M024 last">EU ETS</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> during the period from 2008 to 2012, including renewable energy or energy efficiency technologies which promote technological transfer and sustainable development. Any such agreement may also provide for the use of credits from projects where the baseline used is below the level of free allocation under the measures referred to in Article 10a or below the levels required by </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M090 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> legislation.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11a-7">
<num>
<ins class="O001001M003">
<ins class="substitution O004001M017">7</ins>
</ins>
</num>
<content>
<p>
<ins class="O001001M003">
<ins class="substitution O004001M017">Once an international agreement on climate change has been reached, only credits from projects from third countries which have ratified that agreement shall be accepted in the </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">
<ins class="substitution O010001M025 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017"> from </ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017">1 January 2013</ins>
</ins>
<ins class="O001001M003">
<ins class="substitution O004001M017 last">.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11a-8">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
8
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-11a-9">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
9
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
</article>
<article eId="article-11b" period="#period6">
<num>
<ins class="O001001M003">Article 11b</ins>
</num>
<heading>
<ins class="O001001M003">Project activities</ins>
</heading>
<paragraph eId="article-11b-1">
<num>
<ins class="O001001M003">1</ins>
</num>
<content>
<p>
<ins class="O001001M003">Member States shall take all necessary measures to ensure that baselines for project activities, as defined by subsequent decisions adopted under the UNFCCC or the Kyoto Protocol, undertaken in countries having signed a Treaty of Accession with the Union fully comply with the </ins>
<em>
<ins class="O001001M003">acquis communautaire</ins>
</em>
<ins class="O001001M003">, including the temporary derogations set out in that Treaty of Accession.</ins>
</p>
<p>
<ins class="O001001M003">
<ins class="O004001M018 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
The
</ins>
</ins>
<ins class="O001001M003">
<ins class="O004001M018">
<ins class="substitution O010001M092 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="O004001M018"> and its Member States shall only authorise project activities where all project participants have headquarters either in a country that has concluded the international agreement relating to such projects or in a country or sub-federal or regional entity which is linked to the </ins>
</ins>
<ins class="O001001M003">
<ins class="O004001M018">
<ins class="substitution O010001M027 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
</ins>
<ins class="O001001M003">
<ins class="O004001M018 last"> pursuant to Article 25.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11b-2">
<num>
<ins class="O001001M003">2</ins>
</num>
<content>
<p>
<ins class="O001001M003">Except as provided for in paragraphs 3 and 4, Member States hosting project activities shall ensure that no ERUs or CERs are issued for reductions or limitations of greenhouse gas emissions from </ins>
<ins class="O001001M003">
<ins class="substitution O002001M010 first last">
<noteRef href="#c000004" marker="F4" class="commentary attribute F"/>
activities
</ins>
</ins>
<ins class="O001001M003"> falling within the scope of this Directive.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11b-3">
<num>
<ins class="O001001M003">3</ins>
</num>
<content>
<p>
<ins class="O001001M003">Until </ins>
<ins class="O001001M003">31 December 2012</ins>
<ins class="O001001M003">, for JI and CDM project activities which reduce or limit directly the emissions of an installation falling within the scope of this Directive, ERUs and CERs may be issued only if an equal number of allowances is cancelled by the operator of that installation.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11b-4">
<num>
<ins class="O001001M003">4</ins>
</num>
<content>
<p>
<ins class="O001001M003">Until </ins>
<ins class="O001001M003">31 December 2012</ins>
<ins class="O001001M003">, for JI and CDM project activities which reduce or limit indirectly the emission level of installations falling within the scope of this Directive, ERUs and CERs may be issued only if an equal number of allowances is cancelled from the national registry of the Member State of the ERUs’ or CERs’ origin.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11b-5">
<num>
<ins class="O001001M003">5</ins>
</num>
<content>
<p>
<ins class="O001001M003">A Member State that authorises private or public entities to participate in project activities shall remain responsible for the fulfilment of its obligations under the UNFCCC and the Kyoto Protocol and shall ensure that such participation is consistent with the relevant guidelines, modalities and procedures adopted pursuant to the UNFCCC or the Kyoto Protocol.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11b-6">
<num>
<ins class="O001001M003">6</ins>
</num>
<content>
<p>
<ins class="O001001M003">In the case of hydroelectric power production project activities with a generating capacity exceeding 20 MW, Member States shall, when approving such project activities, ensure that relevant international criteria and guidelines, including those contained in the World Commission on Dams November 2000 Report </ins>
<ins class="O001001M003"></ins>
<ins class="O001001M003">Dams and Development — A New Framework for Decision-Making</ins>
<ins class="O001001M003"></ins>
<ins class="O001001M003 last">, will be respected during the development of such project activities.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-11b-7">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
7
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
</article>
<article eId="article-12" period="#period6">
<num>Article 12</num>
<heading>Transfer, surrender and cancellation of allowances</heading>
<paragraph eId="article-12-1">
<num>1</num>
<intro>
<p>Member States shall ensure that allowances can be transferred between:</p>
</intro>
<subparagraph eId="d4e3419">
<num>a</num>
<content>
<p>
persons within the
<ins class="substitution O010001M093 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
;
</p>
</content>
</subparagraph>
<subparagraph eId="d4e3428">
<num>b</num>
<content>
<p>
persons within the
<ins class="substitution O010001M094 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
and persons in third countries, where such allowances are recognised in accordance with the procedure referred to in Article 25 without restrictions other than those contained in, or adopted pursuant to, this Directive.
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-12-1a">
<num>
<ins class="O004001M019 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
1a
</ins>
</num>
<content>
<p>
<ins class="O004001M019">The Commission shall, by </ins>
<ins class="O004001M019">31 December 2010</ins>
<ins class="O004001M019">, examine whether the market for emissions allowances is sufficiently protected from insider dealing or market manipulation and, if appropriate, shall bring forward proposals to ensure such protection. The relevant provisions of Directive 2003/6/EC of the European Parliament and of the Council of </ins>
<ins class="O004001M019">28 January 2003</ins>
<ins class="O004001M019"> on insider dealing and market manipulation (market abuse)</ins>
<noteRef href="#f00019" class="footnote" marker="19"/>
<ins class="O004001M019 last"> may be used with any appropriate adjustments needed to apply them to trade in commodities.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-12-2">
<num>2</num>
<content>
<p>
Member States shall ensure that allowances issued by a competent authority of another Member State are recognised for the purpose
<ins class="O002001M011 first last">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
of meeting an aircraft operator’s obligations under paragraph 2a or
</ins>
of meeting an operator's obligations under paragraph 3.
</p>
</content>
</paragraph>
<paragraph eId="article-12-2a">
<num>
<ins class="O002001M012 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
2a
</ins>
</num>
<content>
<p>
<ins class="O002001M012 last">Administering Member States shall ensure that, by 30 April each year, each aircraft operator surrenders a number of allowances equal to the total emissions during the preceding calendar year from aviation activities listed in Annex I for which it is the aircraft operator, as verified in accordance with Article 15. Member States shall ensure that allowances surrendered in accordance with this paragraph are subsequently cancelled.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-12-3">
<num>
<ins class="substitution O009001M004 first">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
3
</ins>
</num>
<content>
<p>
<ins class="substitution O009001M004">For the period until </ins>
<ins class="substitution O009001M004">31 December 2020</ins>
<ins class="substitution O009001M004">, Member States shall ensure that, by 30 April each year, the operator of each installation surrenders a number of allowances, other than allowances issued under Chapter II, that is equal to the total emissions from that installation during the preceding calendar year as verified in accordance with Article 15, and that those allowances are subsequently cancelled. For the period starting from </ins>
<ins class="substitution O009001M004">1 January 2021</ins>
<ins class="substitution O009001M004 last">, Member States shall ensure that, by 30 April each year, the operator of each installation surrenders a number of allowances, that is equal to the total emissions from that installation during the preceding calendar year as verified in accordance with Article 15, and that those allowances are subsequently cancelled, subject to the review referred to in Article 28b.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-12-3-a">
<num>
<ins class="O009001M005 first">
<noteRef href="#c000008" marker="F8" class="commentary attribute F"/>
3-a
</ins>
</num>
<content>
<p>
<ins class="O009001M005">Where necessary, and for as long as is necessary, in order to protect the environmental integrity of the EU ETS, aircraft operators and other operators in the EU ETS shall be prohibited from using</ins>
<ins class="O009001M005 last"> allowances that are issued by a Member State in respect of which there are obligations lapsing for aircraft operators and other operators. The legal act referred to in Article 19 shall include the measures necessary in the cases referred to in this paragraph.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-12-3a">
<num>
<ins class="O004001M020 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
3a
</ins>
</num>
<content>
<p>
<ins class="O004001M020">An obligation to surrender allowances shall not arise in respect of emissions verified as captured and transported for permanent storage to a facility for which a permit is in force in accordance with Directive 2009/31/EC of the European Parliament and of the Council of </ins>
<ins class="O004001M020">23 April 2009</ins>
<ins class="O004001M020"> on the geological storage of carbon dioxide</ins>
<noteRef href="#f00020" class="footnote" marker="20"/>
<ins class="O004001M020 last">.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-12-4">
<num>4</num>
<content>
<p>
Member States shall take the necessary steps to ensure that allowances will be cancelled at any time at the request of the person holding them.
<ins class="O010001M183 first last">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
In the event of closure of electricity generation capacity in their territory due to additional national measures, Member States may cancel allowances from the total quantity of allowances to be auctioned by them referred to in Article 10(2) up to an amount corresponding to the average verified emissions of the installation concerned over a period of five years preceding the closure. The Member State concerned shall inform the Commission of such intended cancellation in accordance with the delegated acts adopted pursuant to Article 10(4).
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-12-5">
<num>
<ins class="O004001M021 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
5
</ins>
</num>
<content>
<p>
<ins class="O004001M021 last">Paragraphs 1 and 2 apply without prejudice to Article 10c.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-13" period="#period6">
<num>
<ins class="substitution O010001M184">Article 13</ins>
</num>
<heading>
<ins class="substitution O010001M184 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Validity of allowances
</ins>
</heading>
<content>
<p>
<ins class="substitution O010001M184">Allowances issued from </ins>
<ins class="substitution O010001M184">1 January 2013</ins>
<ins class="substitution O010001M184"> onwards shall be valid indefinitely. Allowances issued from </ins>
<ins class="substitution O010001M184">1 January 2021</ins>
<ins class="substitution O010001M184"> onwards shall include an indication showing in which ten-year period beginning from </ins>
<ins class="substitution O010001M184">1 January 2021</ins>
<ins class="substitution O010001M184 last"> they were issued, and be valid for emissions from the first year of that period onwards.</ins>
</p>
</content>
</article>
<article eId="article-14" period="#period6">
<num>
<ins class="substitution O004001M023">Article 14</ins>
</num>
<heading>
<ins class="substitution O004001M023 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
Monitoring and reporting of emissions
</ins>
</heading>
<paragraph eId="article-14-1">
<num>
<ins class="substitution O004001M023">
<ins class="substitution O010001M185 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
1
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M023">
<ins class="substitution O010001M185">The Commission shall adopt implementing acts concerning the detailed arrangements for the monitoring and reporting of emissions and, where relevant, activity data, from the activities listed in Annex I, for the monitoring and reporting of tonne-kilometre data for the purpose of an application under Article 3e or 3f, which shall be based on the principles for monitoring and reporting set out in Annex IV and the requirements set out in paragraph 2 of this Article. Those implementing acts shall also specify the global warming potential of each greenhouse gas in the requirements for monitoring and reporting emissions for that gas.</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M023">
<ins class="substitution O010001M185 last">Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-14-2">
<num>
<ins class="substitution O004001M023">2</ins>
</num>
<content>
<p>
<ins class="substitution O004001M023">The </ins>
<ins class="substitution O004001M023">
<ins class="substitution O010001M139 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
<ins class="substitution O004001M023"> referred to in paragraph 1 shall take into account the most accurate and up-to-date scientific evidence available, in particular from the IPCC, and may also specify requirements for operators to report on emissions associated with the production of goods produced by energy intensive industries which may be subject to international competition. These </ins>
<ins class="substitution O004001M023">
<ins class="substitution O010001M139 last">acts</ins>
</ins>
<ins class="substitution O004001M023"> may also specify requirements for this information to be verified independently.</ins>
</p>
<p>
<ins class="substitution O004001M023">Those requirements may include reporting on levels of emissions from electricity generation covered by the </ins>
<ins class="substitution O004001M023">
<ins class="substitution O010001M028 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M023"> associated with the production of such goods.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-14-3">
<num>
<ins class="substitution O004001M023">3</ins>
</num>
<content>
<p>
<ins class="substitution O004001M023">Member States shall ensure that each operator of an installation or an aircraft operator monitors and reports the emissions from that installation during each calendar year, or, from </ins>
<ins class="substitution O004001M023">1 January 2010</ins>
<ins class="substitution O004001M023">, the aircraft which it operates, to the competent authority after the end of that year in accordance with the </ins>
<ins class="substitution O004001M023">
<ins class="substitution O010001M140 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
<ins class="substitution O004001M023"> referred to in paragraph 1.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-14-4">
<num>
<ins class="substitution O004001M023">4</ins>
</num>
<content>
<p>
<ins class="substitution O004001M023">The </ins>
<ins class="substitution O004001M023">
<ins class="substitution O010001M141 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
<ins class="substitution O004001M023 last"> referred to in paragraph 1 may include requirements on the use of automated systems and data exchange formats to harmonise communication on the monitoring plan, the annual emission report and the verification activities between the operator, the verifier and competent authorities.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-15" period="#period6">
<num>
<ins class="substitution O002001M018">Article 15</ins>
</num>
<heading>
<ins class="substitution O002001M018 first">
<noteRef href="#c000004" marker="F4" class="commentary attribute F"/>
<ins class="substitution O004001M024 first last">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
Verification and accreditation
</ins>
</ins>
</heading>
<content>
<p>
<ins class="substitution O002001M018">Member States shall ensure that the reports submitted by operators and aircraft operators pursuant to Article 14(3) are verified in accordance with the criteria set out in Annex V and any detailed provisions adopted by the Commission in accordance with this Article, and that the competent authority is informed thereof.</ins>
</p>
<p>
<ins class="substitution O002001M018">Member States shall ensure that an operator or aircraft operator whose report has not been verified as satisfactory in accordance with the criteria set out in Annex V and any detailed provisions adopted by the Commission in accordance with this Article by 31 March each year for emissions during the preceding year cannot make further transfers of allowances until a report from that operator or aircraft operator has been verified as satisfactory.</ins>
</p>
<p>
<ins class="substitution O002001M018">
<ins class="substitution O010001M186 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
The Commission shall adopt implementing acts concerning the verification of emission reports based on the principles set out in Annex V and for the accreditation and supervision of verifiers. The Commission may also adopt implementing acts for the verification of reports submitted by aircraft operators pursuant to Article 14(3) and applications under Articles 3e and 3f, including the verification procedures to be used by verifiers. It shall specify conditions for the accreditation and withdrawal of accreditation, for mutual recognition and peer evaluation of accreditation bodies, as appropriate.
</ins>
</ins>
</p>
<p>
<ins class="substitution O002001M018 last">
<ins class="substitution O010001M186 last">Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).</ins>
</ins>
</p>
</content>
</article>
<article eId="article-15a" period="#period4">
<num>
<ins class="O004001M026">Article 15a</ins>
</num>
<heading>
<ins class="O004001M026 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
Disclosure of information and professional secrecy
</ins>
</heading>
<content>
<p>
<ins class="O004001M026">Member States and the Commission shall ensure that all decisions and reports relating to the quantity and allocation of allowances and to the monitoring, reporting and verification of emissions are immediately disclosed in an orderly manner ensuring non-discriminatory access.</ins>
</p>
<p>
<ins class="O004001M026 last">Information covered by professional secrecy may not be disclosed to any other person or authority except by virtue of the applicable laws, regulations or administrative provisions.</ins>
</p>
</content>
</article>
<article eId="article-16" period="#period6">
<num>Article 16</num>
<heading>Penalties</heading>
<paragraph eId="article-16-1">
<num>1</num>
<content>
<p>
Member States shall lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that such rules are implemented. The penalties provided for must be effective, proportionate and dissuasive. Member States shall notify these provisions to the Commission
<del class="O002001M019 first">
<noteRef href="#c000015" marker="F14" class="commentary attribute F"/>
by
</del>
<del class="O002001M019">31 December 2003</del>
<del class="O002001M019 last"> at the latest,</del>
and shall notify it without delay of any subsequent amendment affecting them.
</p>
</content>
</paragraph>
<paragraph eId="article-16-2">
<num>
<ins class="substitution O002001M020 first">
<noteRef href="#c000004" marker="F4" class="commentary attribute F"/>
2
</ins>
</num>
<content>
<p>
<ins class="substitution O002001M020">Member States shall ensure publication of the names of operators and aircraft operators who are in breach of requirements to surrender sufficient allowances under this Directive.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-3">
<num>
<ins class="substitution O002001M020">3</ins>
</num>
<content>
<p>
<ins class="substitution O002001M020 last">Member States shall ensure that any operator or aircraft operator who does not surrender sufficient allowances by 30 April of each year to cover its emissions during the preceding year shall be held liable for the payment of an excess emissions penalty. The excess emissions penalty shall be EUR 100 for each tonne of carbon dioxide equivalent emitted for which the operator or aircraft operator has not surrendered allowances. Payment of the excess emissions penalty shall not release the operator or aircraft operator from the obligation to surrender an amount of allowances equal to those excess emissions when surrendering allowances in relation to the following calendar year.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-4">
<num>
<ins class="substitution O004001M027 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
4
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M027">The excess emissions penalty relating to allowances issued from </ins>
<ins class="substitution O004001M027">1 January 2013</ins>
<ins class="substitution O004001M027 last"> onwards shall increase in accordance with the European index of consumer prices.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-5">
<num>
<ins class="O002001M021 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
5
</ins>
</num>
<content>
<p>
<ins class="O002001M021">In the event that an aircraft operator fails to comply with the requirements of this Directive and where other enforcement measures have failed to ensure compliance, its administering Member State may request the Commission to decide on the imposition of an operating ban on the aircraft operator concerned.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-6">
<num>
<ins class="O002001M021">6</ins>
</num>
<intro>
<p>
<ins class="O002001M021">Any request by an administering Member State under paragraph 5 shall include:</ins>
</p>
</intro>
<subparagraph eId="d4e3742">
<num>
<ins class="O002001M021">a</ins>
</num>
<content>
<p>
<ins class="O002001M021">evidence that the aircraft operator has not complied with its obligations under this Directive;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e3750">
<num>
<ins class="O002001M021">b</ins>
</num>
<content>
<p>
<ins class="O002001M021">details of the enforcement action which has been taken by that Member State;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e3758">
<num>
<ins class="O002001M021">c</ins>
</num>
<content>
<p>
<ins class="O002001M021">a justification for the imposition of an operating ban at </ins>
<ins class="O002001M021">
<ins class="substitution O010001M095 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O002001M021"> level; and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e3771">
<num>
<ins class="O002001M021">d</ins>
</num>
<content>
<p>
<ins class="O002001M021">a recommendation for the scope of an operating ban at </ins>
<ins class="O002001M021">
<ins class="substitution O010001M096 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O002001M021"> level and any conditions that should be applied.</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-16-7">
<num>
<ins class="O002001M021">7</ins>
</num>
<content>
<p>
<ins class="O002001M021">When requests such as those referred to in paragraph 5 are addressed to the Commission, the Commission shall inform the other Member States through their representatives on the Committee referred to in Article 23(1) in accordance with the Committee’s Rules of Procedure.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-8">
<num>
<ins class="O002001M021">8</ins>
</num>
<content>
<p>
<ins class="O002001M021">The adoption of a decision following a request pursuant to paragraph 5 shall be preceded, when appropriate and practicable, by consultations with the authorities responsible for regulatory oversight of the aircraft operator concerned. Whenever possible, consultations shall be held jointly by the Commission and the Member States.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-9">
<num>
<ins class="O002001M021">9</ins>
</num>
<content>
<p>
<ins class="O002001M021">When the Commission is considering whether to adopt a decision following a request pursuant to paragraph 5, it shall disclose to the aircraft operator concerned the essential facts and considerations which form the basis for such decision. The aircraft operator concerned shall be given an opportunity to submit written comments to the Commission within 10 working days from the date of disclosure.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-10">
<num>
<ins class="O002001M021">10</ins>
</num>
<content>
<p>
<ins class="O002001M021">At the request of a Member State, the Commission may, in accordance with the </ins>
<ins class="O002001M021">
<ins class="substitution O010001M130 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
examination procedure referred to in Article 22a(2)
</ins>
</ins>
<ins class="O002001M021">, adopt a decision to impose an operating ban on the aircraft operator concerned.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-11">
<num>
<ins class="O002001M021">11</ins>
</num>
<content>
<p>
<ins class="O002001M021">Each Member State shall enforce, within its territory, any decisions adopted under paragraph 10. It shall inform the Commission of any measures taken to implement such decisions.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-16-12">
<num>
<ins class="O002001M021">
<ins class="substitution O010001M187 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
12
</ins>
</ins>
</num>
<content>
<p>
<ins class="O002001M021 last">
<ins class="substitution O010001M187 last">The Commission shall adopt implementing acts concerning detailed rules in respect of the procedures referred to in this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).</ins>
</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-17" period="#period2">
<num>
<ins class="substitution O001001M004">Article 17</ins>
</num>
<heading>
<ins class="substitution O001001M004 first">
<noteRef href="#c000006" marker="F6" class="commentary attribute F"/>
Access to information
</ins>
</heading>
<content>
<p>
<ins class="substitution O001001M004 last">Decisions relating to the allocation of allowances, information on project activities in which a Member State participates or authorises private or public entities to participate, and the reports of emissions required under the greenhouse gas emissions permit and held by the competent authority, shall be made available to the public in accordance with Directive 2003/4/EC.</ins>
</p>
</content>
</article>
<article eId="article-18" period="#period2">
<num>Article 18</num>
<heading>Competent authority</heading>
<content>
<p>Member States shall make the appropriate administrative arrangements, including the designation of the appropriate competent authority or authorities, for the implementation of the rules of this Directive. Where more than one competent authority is designated, the work of these authorities undertaken pursuant to this Directive must be coordinated.</p>
<p>
<ins class="O001001M005 first last">
<noteRef href="#c000007" marker="F7" class="commentary attribute F"/>
Member States shall in particular ensure coordination between their designated focal point for approving project activities pursuant to Article 6 (1)(a) of the Kyoto Protocol and their designated national authority for the implementation of Article 12 of the Kyoto Protocol respectively designated in accordance with subsequent decisions adopted under the UNFCCC or the Kyoto Protocol.
</ins>
</p>
</content>
</article>
<article eId="article-18a" period="#period6">
<num>
<ins class="O002001M022">Article 18a</ins>
</num>
<heading>
<ins class="O002001M022 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
Administering Member State
</ins>
</heading>
<paragraph eId="article-18a-1">
<num>
<ins class="O002001M022">1</ins>
</num>
<intro>
<p>
<ins class="O002001M022">The administering Member State in respect of an aircraft operator shall be:</ins>
</p>
</intro>
<subparagraph eId="d4e3883">
<num>
<ins class="O002001M022">a</ins>
</num>
<content>
<p>
<ins class="O002001M022">in the case of an aircraft operator with a valid operating licence granted by a Member State in accordance with the provisions of Council Regulation (EEC) No 2407/92 of </ins>
<ins class="O002001M022">23 July 1992</ins>
<ins class="O002001M022"> on licensing of air carriers</ins>
<noteRef href="#f00021" class="footnote" marker="21"/>
<ins class="O002001M022">, the Member State which granted the operating licence in respect of that aircraft operator; and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e3898">
<num>
<ins class="O002001M022">b</ins>
</num>
<content>
<p>
<ins class="O002001M022">in all other cases, the Member State with the greatest estimated attributed aviation emissions from flights performed by that aircraft operator in the base year.</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-18a-2">
<num>
<ins class="O002001M022">2</ins>
</num>
<content>
<p>
<ins class="O002001M022">Where in the first two years of any period referred to in Article 3c, none of the attributed aviation emissions from flights performed by an aircraft operator falling within paragraph 1(b) of this Article are attributed to its administering Member State, the aircraft operator shall be transferred to another administering Member State in respect of the next period. The new administering Member State shall be the Member State with the greatest estimated attributed aviation emissions from flights performed by that aircraft operator during the first two years of the previous period.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-18a-3">
<num>
<ins class="O002001M022">3</ins>
</num>
<intro>
<p>
<ins class="O002001M022">Based on the best available information, the Commission shall:</ins>
</p>
</intro>
<subparagraph eId="d4e3922">
<num>
<ins class="O002001M022">a</ins>
</num>
<content>
<p>
<ins class="O002001M022">before </ins>
<ins class="O002001M022">1 February 2009</ins>
<ins class="O002001M022">, publish a list of aircraft operators which performed an aviation activity listed in Annex I on or after </ins>
<ins class="O002001M022">1 January 2006</ins>
<ins class="O002001M022"> specifying the administering Member State for each aircraft operator in accordance with paragraph 1; and</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e3938">
<num>
<ins class="O002001M022">b</ins>
</num>
<content>
<p>
<ins class="O002001M022">before 1 February of each subsequent year, update the list to include aircraft operators which have subsequently performed an aviation activity listed in Annex I.</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-18a-4">
<num>
<ins class="O002001M022">4</ins>
</num>
<content>
<p>
<ins class="O002001M022">The Commission may, in accordance with the </ins>
<ins class="O002001M022">
<ins class="substitution O010001M131 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
examination procedure referred to in Article 22a(2)
</ins>
</ins>
<ins class="O002001M022">, develop guidelines relating to the administration of aircraft operators under this Directive by administering Member States.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-18a-5">
<num>
<ins class="O002001M022">5</ins>
</num>
<content>
<p>
<ins class="O002001M022">For the purposes of paragraph 1, </ins>
<ins class="O002001M022">base year</ins>
<ins class="O002001M022"> means, in relation to an aircraft operator which started operating in the </ins>
<ins class="O002001M022">
<ins class="substitution O010001M097 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O002001M022"> after </ins>
<ins class="O002001M022">1 January 2006</ins>
<ins class="O002001M022">, the first calendar year of operation, and in all other cases, the calendar year starting on </ins>
<ins class="O002001M022">1 January 2006</ins>
<ins class="O002001M022">.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-18b" period="#period3">
<num>
<ins class="O002001M022">Article 18b</ins>
</num>
<heading>
<ins class="O002001M022">Assistance from Eurocontrol</ins>
</heading>
<content>
<p>
<ins class="O002001M022 last">For the purposes of carrying out its obligations under Articles 3c(4) and 18a, the Commission may request the assistance of Eurocontrol or another relevant organisation and may conclude to that effect any appropriate agreements with those organisations.</ins>
</p>
</content>
</article>
<article eId="article-19" period="#period6">
<num>Article 19</num>
<heading>Registries</heading>
<paragraph eId="article-19-1">
<num>
<ins class="substitution O004001M028 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
1
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M028">Allowances issued from </ins>
<ins class="substitution O004001M028">1 January 2012</ins>
<ins class="substitution O004001M028"> onwards shall be held in the </ins>
<ins class="substitution O004001M028">
<ins class="substitution O010001M098 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M028"> registry for the execution of processes pertaining to the maintenance of the holding accounts opened in the Member State and the allocation, surrender and cancellation of allowances under the Commission </ins>
<ins class="substitution O004001M028">
<ins class="substitution O010001M142 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Acts
</ins>
</ins>
<ins class="substitution O004001M028"> referred to in paragraph 3.</ins>
</p>
<p>
<ins class="substitution O004001M028 last">Each Member State shall be able to fulfil the execution of authorised operations under the UNFCCC or the Kyoto Protocol.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-19-2">
<num>2</num>
<content>
<p>Any person may hold allowances. The registry shall be accessible to the public and shall contain separate accounts to record the allowances held by each person to whom and from whom allowances are issued or transferred.</p>
</content>
</paragraph>
<paragraph eId="article-19-3">
<num>
<ins class="substitution O010001M188 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
3
</ins>
</num>
<content>
<p>
<ins class="substitution O010001M188">The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive by laying down all necessary requirements concerning the Union Registry for the trading period commencing on </ins>
<ins class="substitution O010001M188">1 January 2013</ins>
<ins class="substitution O010001M188 last"> and subsequent periods, in the form of standardised electronic databases containing common data elements to track the issue, holding, transfer and cancellation, as applicable, of allowances, and to provide for public access and confidentiality, as appropriate. Those delegated acts shall also include provisions to put into effect rules on the mutual recognition of allowances in agreements to link emission trading systems.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-19-4">
<num>
<ins class="O004001M029 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
4
</ins>
</num>
<content>
<p>
<ins class="O004001M029">The </ins>
<ins class="O004001M029">
<ins class="substitution O010001M143 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Acts
</ins>
</ins>
<ins class="O004001M029"> referred to in paragraph 3 shall contain appropriate modalities for the </ins>
<ins class="O004001M029">
<ins class="substitution O010001M099 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M029"> registry to undertake transactions and other operations to implement arrangements referred to in</ins>
<ins class="O004001M029"> Article 25(1b). These </ins>
<ins class="O004001M029">
<ins class="substitution O010001M143 last">Acts</ins>
</ins>
<ins class="O004001M029"> shall also include processes for the change and incident management for the </ins>
<ins class="O004001M029">
<ins class="substitution O010001M099">Union</ins>
</ins>
<ins class="O004001M029"> registry with regard to issues in paragraph 1 of this Article. It shall contain appropriate modalities for the </ins>
<ins class="O004001M029">
<ins class="substitution O010001M099 last">Union</ins>
</ins>
<ins class="O004001M029 last"> registry to ensure that initiatives of the Member States pertaining to efficiency improvement, administrative cost management and quality control measures are possible.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-20" period="#period1">
<num>Article 20</num>
<heading>Central Administrator</heading>
<paragraph eId="article-20-1">
<num>1</num>
<content>
<p>The Commission shall designate a Central Administrator to maintain an independent transaction log recording the issue, transfer and cancellation of allowances.</p>
</content>
</paragraph>
<paragraph eId="article-20-2">
<num>2</num>
<content>
<p>The Central Administrator shall conduct an automated check on each transaction in registries through the independent transaction log to ensure there are no irregularities in the issue, transfer and cancellation of allowances.</p>
</content>
</paragraph>
<paragraph eId="article-20-3">
<num>3</num>
<content>
<p>If irregularities are identified through the automated check, the Central Administrator shall inform the Member State or Member States concerned who shall not register the transactions in question or any further transactions relating to the allowances concerned until the irregularities have been resolved.</p>
</content>
</paragraph>
</article>
<article eId="article-21" period="#period6">
<num>Article 21</num>
<heading>Reporting by Member States</heading>
<paragraph eId="article-21-1">
<num>1</num>
<content>
<p>
Each year the Member States shall submit to the Commission a report on the application of this Directive.
<ins class="substitution O004001M030 first last">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
That report shall pay particular attention to the arrangements for the allocation of allowances, the operation of registries, the application of the implementing measures on monitoring and reporting, verification and accreditation and issues relating to compliance with this Directive and on the fiscal treatment of allowances, if any.
</ins>
The first report shall be sent to the Commission by 30 June 2005.
<ins class="substitution O010001M189 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
The report shall be drawn up on the basis of a questionnaire or outline adopted by the Commission in the form of implementing acts. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 22a(2).
</ins>
The questionnaire or outline shall be sent to Member States at least six months before the deadline for the submission of the first report.
</p>
</content>
</paragraph>
<paragraph eId="article-21-2">
<num>2</num>
<content>
<p>On the basis of the reports referred to in paragraph 1, the Commission shall publish a report on the application of this Directive within three months of receiving the reports from the Member States.</p>
</content>
</paragraph>
<paragraph eId="article-21-3">
<num>
<ins class="substitution O004001M031 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
3
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M031">The Commission shall organise an exchange of information between the competent authorities of the Member States concerning developments relating to issues of allocation, the use of ERUs and CERs in the </ins>
<ins class="substitution O004001M031">
<ins class="substitution O010001M030 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M031 last">, the operation of registries, monitoring, reporting, verification, accreditation, information technology, and compliance with this Directive.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-21-4">
<num>
<ins class="O010001M190 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
4
</ins>
</num>
<content>
<p>
<ins class="O010001M190 last">Every three years, the report referred to in paragraph 1 shall also pay particular attention to the equivalent measures adopted for small installations excluded from the EU ETS. The issue of equivalent measures adopted for small installations shall also be considered in the exchange of information referred to in paragraph 3.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-21a" period="#period2">
<num>
<ins class="O001001M009">Article 21a</ins>
</num>
<heading>
<ins class="O001001M009 first">
<noteRef href="#c000007" marker="F7" class="commentary attribute F"/>
Support of capacity-building activities
</ins>
</heading>
<content>
<p>
<ins class="O001001M009 last">In accordance with the UNFCCC, the Kyoto Protocol and any subsequent decision adopted for their implementation, the Commission and the Member States shall endeavour to support capacity-building activities in developing countries and countries with economies in transition in order to help them take full advantage of JI and the CDM in a manner that supports their sustainable development strategies and to facilitate the engagement of entities in JI and CDM project development and implementation.</ins>
</p>
</content>
</article>
<article eId="article-22" period="#period6">
<num>
<ins class="substitution O010001M191">Article 22</ins>
</num>
<heading>
<ins class="substitution O010001M191 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Amendments to the Annexes
</ins>
</heading>
<content>
<p>
<ins class="substitution O010001M191 last">The Commission is empowered to adopt delegated acts in accordance with Article 23 to amend, where appropriate, the Annexes to this Directive, with the exception of Annexes I, IIa and IIb, in the light of the reports provided for in Article 21 and of the experience of the application of this Directive. Annexes IV and V may be amended in order to improve the monitoring, reporting and verification of emissions.</ins>
</p>
</content>
</article>
<article eId="article-22a" period="#period6">
<num>
<ins class="O010001M192">Article 22a</ins>
</num>
<heading>
<ins class="O010001M192 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
Committee procedure
</ins>
</heading>
<paragraph eId="article-22a-1">
<num>
<ins class="O010001M192">1</ins>
</num>
<content>
<p>
<ins class="O010001M192">The Commission shall be assisted by the Climate Change Committee established by Article 26 of Regulation (EU) No 525/2013 of the European Parliament and of the Council</ins>
<noteRef href="#f00022" class="footnote" marker="22"/>
<ins class="O010001M192">. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011 of the European Parliament and of the Council</ins>
<noteRef href="#f00023" class="footnote" marker="23"/>
<ins class="O010001M192">.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-22a-2">
<num>
<ins class="O010001M192">2</ins>
</num>
<content>
<p>
<ins class="O010001M192">Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.</ins>
</p>
<p>
<ins class="O010001M192 last">Where the committee delivers no opinion, the Commission shall not adopt the draft implementing act and the third subparagraph of Article 5(4) of Regulation (EU) No 182/2011 shall apply.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-23" period="#period6">
<num>
<ins class="substitution O010001M193">Article 23</ins>
</num>
<heading>
<ins class="substitution O010001M193 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Exercise of the delegation
</ins>
</heading>
<paragraph eId="article-23-1">
<num>
<ins class="substitution O010001M193">1</ins>
</num>
<content>
<p>
<ins class="substitution O010001M193">The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-23-2">
<num>
<ins class="substitution O010001M193">2</ins>
</num>
<content>
<p>
<ins class="substitution O010001M193">The power to adopt delegated acts referred to in Articles 3d(3), 10(4), 10a(1) and (8), 10b(5), 19(3), Article 22, Articles 24(3), 24a(1), 25a(1) and Article 28c shall be conferred on the Commission for an indeterminate period of time from </ins>
<ins class="substitution O010001M193">8 April 2018</ins>
<ins class="substitution O010001M193">.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-23-3">
<num>
<ins class="substitution O010001M193">3</ins>
</num>
<content>
<p>
<ins class="substitution O010001M193">The delegation of power referred to in Articles 3d(3), 10(4), 10a(1) and (8), 10b(5), 19(3), Article 22, Articles 24(3), 24a(1), 25a(1) and Article 28c may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the </ins>
<em>
<ins class="substitution O010001M193">Official Journal of the European Union</ins>
</em>
<ins class="substitution O010001M193"> or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-23-4">
<num>
<ins class="substitution O010001M193">4</ins>
</num>
<content>
<p>
<ins class="substitution O010001M193">Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of </ins>
<ins class="substitution O010001M193">13 April 2016</ins>
<ins class="substitution O010001M193"> on Better Law-Making</ins>
<noteRef href="#f00024" class="footnote" marker="24"/>
<ins class="substitution O010001M193">.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-23-5">
<num>
<ins class="substitution O010001M193">5</ins>
</num>
<content>
<p>
<ins class="substitution O010001M193">As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-23-6">
<num>
<ins class="substitution O010001M193">6</ins>
</num>
<content>
<p>
<ins class="substitution O010001M193 last">A delegated act adopted pursuant to Articles 3d(3), 10(4), 10a(1) and (8), 10b(5), 19(3), Article 22, Articles 24(3), 24a(1), 25a(1) and Article 28c shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of two months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-24" period="#period6">
<num>
<ins class="substitution O004001M034">Article 24</ins>
</num>
<heading>
<ins class="substitution O004001M034 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
Procedures for unilateral inclusion of additional activities and gases
</ins>
</heading>
<paragraph eId="article-24-1">
<num>
<ins class="substitution O004001M034">
<ins class="substitution O010001M194 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
1
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M034">
<ins class="substitution O010001M194 last">From 2008, Member States may apply emission allowance trading in accordance with this Directive to activities and to greenhouse gases which are not listed in Annex I, taking into account all relevant criteria, in particular the effects on the internal market, potential distortions of competition, the environmental integrity of the EU ETS and the reliability of the planned monitoring and reporting system, provided that the inclusion of such activities and greenhouse gases is approved by the Commission, in accordance with delegated acts which the Commission is empowered to adopt in accordance with Article 23.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-24-2">
<num>
<ins class="substitution O004001M034">2</ins>
</num>
<content>
<p>
<ins class="substitution O004001M034">When the inclusion of additional activities and gases is approved, the Commission may at the same time authorise the issue of additional allowances and may authorise other Member States to include such additional activities and gases.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-24-3">
<num>
<ins class="substitution O004001M034">3</ins>
</num>
<content>
<p>
<ins class="substitution O004001M034">On the initiative of the Commission or at the request of a Member State, these </ins>
<ins class="substitution O004001M034">
<ins class="substitution O010001M144 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
<ins class="substitution O004001M034"> may be adopted on the monitoring of, and reporting on, emissions concerning activities, installations and greenhouse gases which are not listed as a combination in Annex I, if that monitoring and reporting can be carried out with sufficient accuracy.</ins>
</p>
<p>
<ins class="substitution O004001M034 last">
<ins class="substitution O010001M195 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive to this effect.
</ins>
</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-24a" period="#period6">
<num>
<ins class="O004001M035">Article 24a</ins>
</num>
<heading>
<ins class="O004001M035 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
Harmonised rules for projects that reduce emissions
</ins>
</heading>
<paragraph eId="article-24a-1">
<num>
<ins class="O004001M035">
<ins class="substitution O010001M196 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
1
</ins>
</ins>
</num>
<content>
<p>
<ins class="O004001M035">
<ins class="substitution O010001M196">In addition to the inclusions provided for in Article 24, the Commission may adopt measures for issuing allowances or credits in respect of projects administered by Member States that reduce greenhouse gas emissions not covered by the EU ETS.</ins>
</ins>
</p>
<p>
<ins class="O004001M035">
<ins class="substitution O010001M196">Such measures shall be consistent with acts adopted pursuant to former Article 11b(7) as in force before </ins>
</ins>
<ins class="O004001M035">
<ins class="substitution O010001M196">8 April 2018</ins>
</ins>
<ins class="O004001M035">
<ins class="substitution O010001M196 last">. The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive by setting out the procedure to be followed.</ins>
</ins>
</p>
<p>
<ins class="O004001M035">Any such measures shall not result in the double-counting of emission reductions nor impede the undertaking of other policy measures to reduce emissions not covered by the </ins>
<ins class="O004001M035">
<ins class="substitution O010001M033 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="O004001M035">. Measures shall only be adopted where inclusion is not possible in accordance with Article 24, and the next review of the </ins>
<ins class="O004001M035">
<ins class="substitution O010001M033 last">EU ETS</ins>
</ins>
<ins class="O004001M035"> shall consider harmonising the coverage of those emissions across the </ins>
<ins class="O004001M035">
<ins class="substitution O010001M100 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O004001M035">.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-24a-2">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
2
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
<paragraph eId="article-24a-3">
<num>
<ins class="O004001M035">3</ins>
</num>
<content>
<p>
<ins class="O004001M035">A Member State can refuse to issue allowances or credits in respect of certain types of projects that reduce greenhouse gas emissions on its own territory.</ins>
</p>
<p>
<ins class="O004001M035 last">Such projects will be executed on the basis of the agreement of the Member State in which the project takes place.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-25" period="#period6">
<num>Article 25</num>
<heading>
Links with other greenhouse gas emissions trading
<ins class="substitution O010001M062 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
systems
</ins>
</heading>
<paragraph eId="article-25-1">
<num>1</num>
<content>
<p>
Agreements should be concluded with third countries listed in Annex B to the Kyoto Protocol which have ratified the Protocol to provide for the mutual recognition of allowances between the
<ins class="substitution O010001M034 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
and other greenhouse gas emissions trading
<ins class="substitution O010001M063 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
systems
</ins>
in accordance with the rules set out in Article 300 of the Treaty.
</p>
</content>
</paragraph>
<paragraph eId="article-25-1a">
<num>
<ins class="O004001M036 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
1a
</ins>
</num>
<content>
<p>
<ins class="O004001M036">Agreements may be made to provide for the recognition of allowances between the </ins>
<ins class="O004001M036">
<ins class="substitution O010001M035 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="O004001M036"> and compatible mandatory greenhouse gas emissions trading systems with absolute emissions caps established in any other country or in sub-federal or regional entities.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-25-1b">
<num>
<ins class="O004001M036">1b</ins>
</num>
<content>
<p>
<ins class="O004001M036">Non-binding arrangements may be made with third countries or with sub-federal or regional entities to provide for administrative and technical coordination in relation to allowances in the </ins>
<ins class="O004001M036">
<ins class="substitution O010001M036 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="O004001M036 last"> or other mandatory greenhouse gas emissions trading systems with absolute emissions caps.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-25-2">
<num>
<noteRef href="#c000010" marker="F10" class="commentary F"/>
2
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
</article>
<article eId="article-25a" period="#period6">
<num>
<ins class="O002001M026">Article 25a</ins>
</num>
<heading>
<ins class="O002001M026 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
Third country measures to reduce the climate change impact of aviation
</ins>
</heading>
<paragraph eId="article-25a-1">
<num>
<ins class="O002001M026">1</ins>
</num>
<content>
<p>
<ins class="O002001M026">
<ins class="substitution O010001M199 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Where a third country adopts measures for reducing the climate change impact of flights departing from that third country which land in the Union, the Commission, after consulting with that third country, and with Member States within the Committee referred to in Article 22a(1), shall consider options available in order to provide for optimal interaction between the EU ETS and that country's measures.
</ins>
</ins>
</p>
<p>
<ins class="O002001M026">
<ins class="substitution O010001M199 last">The Commission is empowered to adopt delegated acts in accordance with Article 23 to amend Annex I to this Directive to provide for flights arriving from the third country concerned to be excluded from the aviation activities listed in Annex I or to provide for any other amendments to the aviation activities listed in Annex I, except in relation to scope, which are required by an agreement concluded pursuant to Article 218 of the Treaty on the Functioning of the European Union.</ins>
</ins>
</p>
<p>
<ins class="O002001M026">The Commission may propose to the European Parliament and the Council any other amendments to this Directive.</ins>
</p>
<p>
<ins class="O002001M026">The Commission may also, where appropriate, make recommendations to the Council in accordance with Article 300(1) of the Treaty to open negotiations with a view to concluding an agreement with the third country concerned.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-25a-2">
<num>
<ins class="O002001M026">2</ins>
</num>
<content>
<p>
<ins class="O002001M026">The </ins>
<ins class="O002001M026">
<ins class="substitution O010001M103 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="O002001M026 last"> and its Member States shall continue to seek an agreement on global measures to reduce greenhouse gas emissions from aviation. In the light of any such agreement, the Commission shall consider whether amendments to this Directive as it applies to aircraft operators are necessary.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-26" period="#period1">
<num>Article 26</num>
<heading>Amendment of Directive 96/61/EC</heading>
<content>
<p>In Article 9(3) of Directive 96/61/EC the following subparagraphs shall be added:</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="unknown unknown unknown single" startQuote="" endQuote="">
<p>
Where emissions of a greenhouse gas from an installation are specified in Annex I to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC
<noteRef href="#f00025" class="footnote" marker="25"/>
in relation to an activity carried out in that installation, the permit shall not include an emission limit value for direct emissions of that gas unless it is necessary to ensure that no significant local pollution is caused.
</p>
<p>For activities listed in Annex I to Directive 2003/87/EC, Member States may choose not to impose requirements relating to energy efficiency in respect of combustion units or other units emitting carbon dioxide on the site.</p>
<p>Where necessary, the competent authorities shall amend the permit as appropriate.</p>
<p>The three preceding subparagraphs shall not apply to installations temporarily excluded from the scheme for greenhouse gas emission allowance trading within the Community in accordance with Article 27 of Directive 2003/87/EC.</p>
</quotedStructure>
</mod>
</p>
</content>
</article>
<article eId="article-27" period="#period6">
<num>
<ins class="substitution O004001M037">Article 27</ins>
</num>
<heading>
<ins class="substitution O004001M037 first">
<noteRef href="#c000005" marker="F5" class="commentary attribute F"/>
Exclusion of small installations subject to equivalent measures
</ins>
</heading>
<paragraph eId="article-27-1">
<num>
<ins class="substitution O004001M037">1</ins>
</num>
<intro>
<p>
<ins class="substitution O004001M037">Following consultation with the operator, Member States may exclude from the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M038 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M037"> installations which have reported to the competent authority emissions of less than </ins>
<ins class="substitution O004001M037">25 000</ins>
<ins class="substitution O004001M037"> tonnes of carbon dioxide equivalent and, where they carry out combustion activities, have a rated thermal input below 35 MW, excluding emissions from biomass, in each of the three years preceding the notification under point (a), and which are subject to measures that will achieve an equivalent contribution to emission reductions, if the Member State concerned complies with the following conditions:</ins>
</p>
</intro>
<subparagraph eId="d4e4551">
<num>
<ins class="substitution O004001M037">a</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">it notifies the Commission of each such installation, specifying the equivalent measures applying to that installation that will achieve an equivalent contribution to emission reductions that are in place, before the list of installations pursuant to Article 11(1) has to be submitted and at the latest when this list is submitted to the Commission;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4559">
<num>
<ins class="substitution O004001M037">b</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">it confirms that monitoring arrangements are in place to assess whether any installation emits </ins>
<ins class="substitution O004001M037">25 000</ins>
<ins class="substitution O004001M037"> tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year. Member States may allow simplified monitoring, reporting and verification measures for installations with average annual verified emissions between 2008 and 2010 which are below </ins>
<ins class="substitution O004001M037">5 000</ins>
<ins class="substitution O004001M037"> tonnes a year, in accordance with Article 14;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4575">
<num>
<ins class="substitution O004001M037">c</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">it confirms that if any installation emits </ins>
<ins class="substitution O004001M037">25 000</ins>
<ins class="substitution O004001M037"> tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year or the measures applying to that installation that will achieve an equivalent contribution to emission reductions are no longer in place, the installation will be reintroduced into the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M039 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M037">;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4592">
<num>
<ins class="substitution O004001M037">d</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">it publishes the information referred to in points (a), (b) and (c) for public comment.</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="substitution O004001M037">Hospitals may also be excluded if they undertake equivalent measures.</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-27-2">
<num>
<ins class="substitution O004001M037">2</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">If, following a period of three months from the date of notification for public comment, the Commission does not object within a further period of six months, the exclusion shall be deemed approved.</ins>
</p>
<p>
<ins class="substitution O004001M037">Following the surrender of allowances in respect of the period during which the installation is in the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M040 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M037">, the installation shall be excluded and the Member State shall no longer issue free allowances to the installation pursuant to Article 10a.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-27-3">
<num>
<ins class="substitution O004001M037">3</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">When an installation is reintroduced into the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M041 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M037"> pursuant to paragraph 1(c), any allowances issued pursuant to Article 10a shall be granted starting with the year of the reintroduction. Allowances issued to these installations shall be deducted from the quantity to be auctioned pursuant to Article 10(2) by the Member State in which the installation is situated.</ins>
</p>
<p>
<ins class="substitution O004001M037">
<ins class="substitution O010001M200 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Any such installation shall stay in the EU ETS for the rest of the period referred to in Article 11(1) during which it was reintroduced.
</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-27-4">
<num>
<ins class="substitution O004001M037">4</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">For installations which have not been included in the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M043 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M037"> during the period from 2008 to 2012, simplified requirements for monitoring, reporting and verification may be applied for determining emissions in the three years preceding the notification under paragraph 1 point (a).</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-27a" period="#period6">
<num>
<ins class="substitution O004001M037">
<ins class="O010001M201">Article 27a</ins>
</ins>
</num>
<heading>
<ins class="substitution O004001M037">
<ins class="O010001M201 first">
<noteRef href="#c000013" marker="F13" class="commentary attribute F"/>
Optional exclusion of installations emitting less than
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O010001M201">2 500</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O010001M201"> tonnes</ins>
</ins>
</heading>
<paragraph eId="article-27a-1">
<num>
<ins class="substitution O004001M037">
<ins class="O010001M201">1</ins>
</ins>
</num>
<intro>
<p>
<ins class="substitution O004001M037">
<ins class="O010001M201">Member States may exclude from the EU ETS installations that have reported to the competent authority of the Member State concerned emissions of less than </ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O010001M201">2 500</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O010001M201"> tonnes of carbon dioxide equivalent, disregarding emissions from biomass, in each of the three years preceding the notification under point (a), provided that the Member State concerned:</ins>
</ins>
</p>
</intro>
<subparagraph eId="d4e4684">
<num>
<ins class="substitution O004001M037">
<ins class="O010001M201">a</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O010001M201">notifies the Commission of each such installation before the list of installations pursuant to Article 11(1) is to be submitted or at the latest when that list is submitted to the Commission;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4694">
<num>
<ins class="substitution O004001M037">
<ins class="O010001M201">b</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O010001M201">confirms that simplified monitoring arrangements are in place to assess whether any installation emits </ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O010001M201">2 500</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O010001M201"> tonnes or more of carbon dioxide equivalent, disregarding emissions from biomass, in any one calendar year;</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4710">
<num>
<ins class="substitution O004001M037">
<ins class="O010001M201">c</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O010001M201">confirms that if any installation emits </ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O010001M201">2 500</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O010001M201"> tonnes or more of carbon dioxide equivalent, disregarding emissions from biomass, in any one calendar year, the installation will be reintroduced into the EU ETS; and</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4726">
<num>
<ins class="substitution O004001M037">
<ins class="O010001M201">d</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O010001M201">makes the information referred to in points (a), (b) and (c) available to the public.</ins>
</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-27a-2">
<num>
<ins class="substitution O004001M037">
<ins class="O010001M201">2</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O010001M201">When an installation is reintroduced into the EU ETS pursuant to point (c) of paragraph 1 of this Article, any allowances allocated pursuant to Article 10a shall be granted starting from the year of the reintroduction. Allowances allocated to such an installation shall be deducted from the quantity to be auctioned pursuant to Article 10(2) by the Member State in which the installation is situated.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-27a-3">
<num>
<ins class="substitution O004001M037">
<ins class="O010001M201">3</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O010001M201 last">Member States may also exclude from the EU ETS reserve or backup units which did not operate more than 300 hours per year in each of the three years preceding the notification under point (a) of paragraph 1, under the same conditions as set out in paragraphs 1 and 2.</ins>
</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-28" period="#period6">
<num>
<ins class="substitution O004001M037">Article 28</ins>
</num>
<heading>
<ins class="substitution O004001M037">Adjustments applicable upon the approval by the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M104 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> of an international agreement on climate change</ins>
</heading>
<paragraph eId="article-28-1">
<num>
<ins class="substitution O004001M037">1</ins>
</num>
<intro>
<p>
<ins class="substitution O004001M037">Within three months of the signature by the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M105 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> of an international agreement on climate change leading, by 2020, to mandatory reductions of greenhouse gas emissions exceeding 20 % compared to 1990 levels, as reflected in the 30 % reduction commitment as endorsed by the European Council of March 2007, the Commission shall submit a report assessing, in particular, the following elements:</ins>
</p>
</intro>
<subparagraph eId="d4e4783">
<num>
<ins class="substitution O004001M037">a</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">the nature of the measures agreed upon in the framework of the international negotiations as well as the commitments made by other developed countries to comparable emission reductions to those of the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M106 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> and the commitments made by economically more advanced developing countries to contributing adequately according to their responsibilities and respective capabilities;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4796">
<num>
<ins class="substitution O004001M037">b</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">the implications of the international agreement on climate change, and consequently, options required at </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M107 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> level, in order to move to the more ambitious 30 % reduction target in a balanced, transparent and equitable way, taking into account work under the Kyoto Protocol's first commitment period;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4809">
<num>
<ins class="substitution O004001M037">c</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M108 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> manufacturing industries' competitiveness in the context of carbon leakage risks;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4822">
<num>
<ins class="substitution O004001M037">d</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">the impact of the international agreement on climate change on other </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M109 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> economic sectors;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4835">
<num>
<ins class="substitution O004001M037">e</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">the impact on the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M110 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> agriculture sector, including carbon leakage risks;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4848">
<num>
<ins class="substitution O004001M037">f</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">the appropriate modalities for including emissions and removals related to land use, land use change and forestry in the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M111 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037">;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4861">
<num>
<ins class="substitution O004001M037">g</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">afforestation, reforestation, avoided deforestation and forest degradation in third countries in the event of the establishment of any internationally recognised system in this context;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4869">
<num>
<ins class="substitution O004001M037">h</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">the need for additional </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M112 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> policies and measures in view of the greenhouse gas reduction commitments of the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M312 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union'
</ins>
</ins>
<ins class="substitution O004001M037"> and of Member States.</ins>
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="article-28-2">
<num>
<ins class="substitution O004001M037">2</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">On the basis of the report referred to in paragraph 1, the Commission shall, as appropriate, submit a legislative proposal to the European Parliament and to the Council amending this Directive pursuant to paragraph 1, with a view to the amending Directive entering into force upon the approval by the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M113 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Union
</ins>
</ins>
<ins class="substitution O004001M037"> of the international agreement on climate change and in view of the emission reduction commitment to be implemented under that agreement.</ins>
</p>
<p>
<ins class="substitution O004001M037">The proposal shall be based upon the principles of transparency, economic efficiency and cost-effectiveness, as well as fairness and solidarity in the distribution of efforts between Member States.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28-3">
<num>
<ins class="substitution O004001M037">3</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">The proposal shall allow, as appropriate, operators to use, in addition to the credits provided for in this Directive, CERs, ERUs or other approved credits from third countries which have ratified the international agreement on climate change.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28-4">
<num>
<ins class="substitution O004001M037">4</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">The proposal shall also include, as appropriate, any other measures needed to help reach the mandatory reductions in accordance with paragraph 1 in a transparent, balanced and equitable way and, in particular, shall include implementing measures to provide for the use of additional types of project credits by operators in the </ins>
<ins class="substitution O004001M037">
<ins class="substitution O010001M044 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
EU ETS
</ins>
</ins>
<ins class="substitution O004001M037"> to those referred to in paragraphs 2 to 5 of Article 11a or the use by such operators of other mechanisms created under the international agreement on climate change, as appropriate.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28-5">
<num>
<ins class="substitution O004001M037">5</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">The proposal shall include the appropriate transitional and suspensive measures pending the entry into force of the international agreement on climate change.</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-28a" period="#period5">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O007001M006 last">Article 28a</ins>
</ins>
</ins>
</num>
<heading>
<ins class="substitution O004001M037">
<ins class="O007001M001 first">
<noteRef href="#c000016" marker="F15" class="commentary attribute F"/>
<ins class="substitution O007001M006 first">
<noteRef href="#c000017" marker="X1" class="commentary attribute X"/>
<ins class="substitution O009001M006 first last">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
Derogations applicable in advance of the implementation of the ICAO's global market-based measure
</ins>
</ins>
</ins>
</ins>
</heading>
<paragraph eId="article-28a-1">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">1</ins>
</ins>
</num>
<intro>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">By way of derogation from Articles 12(2a), 14(3) and Article 16, Member States shall consider the requirements set out in those provisions to be satisfied and shall take no action against aircraft operators in respect of:</ins>
</ins>
</p>
</intro>
<subparagraph eId="d4e4957">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007 first">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
a
</ins>
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007">all emissions from flights to and from aerodromes located in countries outside the EEA in each calendar year from </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007">1 January 2013</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007"> to </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007">31 December 2023</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007">, subject to the review referred to in Article 28b;</ins>
</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e4985">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007">b</ins>
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007">all emissions from flights between an aerodrome located in an outermost region within the meaning of Article 349 of the Treaty on the Functioning of the European Union and an aerodrome located in another region of the EEA in each calendar year from </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007">1 January 2013</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007"> to </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007">31 December 2023</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M007 last">, subject to the review referred to in Article 28b.</ins>
</ins>
</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e5013">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017 first">
<noteRef href="#c000018" marker="F16" class="commentary attribute F"/>
c
</del>
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017">the surrender of allowances, corresponding to verified 2013 emissions from flights between aerodromes located in States in the EEA, taking place by </del>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017">30 April 2015</del>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017"> instead of </del>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017">30 April 2014</del>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017">, and verified 2013 emissions for those flights being reported by </del>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017">31 March 2015</del>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017"> instead of </del>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017">31 March 2014</del>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<del class="O009001M017 last">.</del>
</ins>
</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">For the purposes of Articles 11a, 12 and 14, the verified emissions from flights other than those referred to in the first subparagraph shall be considered to be the verified emissions of the aircraft operator.</ins>
</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-28a-2">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009 first">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
2
</ins>
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">By way of derogation from Articles 3e and 3f, aircraft operators benefiting from the derogations provided for in points (a) and (b) of paragraph 1 of this Article shall be issued, each year, with a number of free allowances reduced in proportion to the reduction of the surrender obligation provided for in those points.</ins>
</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">By way of derogation from Article 3f(8), allowances that are not allocated from the special reserve shall be cancelled.</ins>
</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">From </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">1 January 2021</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">, the number of allowances allocated to aircraft operators shall be subject to the application of the linear factor referred to in Article 9, subject to the review referred to in Article 28b.</ins>
</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">As regards activity in the period from </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">1 January 2017</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009"> to </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">31 December 2023</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">, Member States shall, before </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009">1 September 2018</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M009 last">, publish the number of aviation allowances allocated to each aircraft operator.</ins>
</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28a-3">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">3</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">By way of derogation from Article 3d, Member States shall auction a number of aviation allowances reduced in proportion to the reduction in the total number of allowances issued.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28a-4">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M010 first">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
4
</ins>
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M010">By way of derogation from Article 3d(3), the number of allowances to be auctioned by each Member State in respect of the period from </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M010">1 January 2013</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M010"> to </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M010">31 December 2023</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M010 last"> shall be reduced to correspond to its share of attributed aviation emissions from flights which are not subject to the derogations provided for in points (a) and (b) of paragraph 1 of this Article.</ins>
</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28a-5">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">5</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">By way of derogation from Article 3g, aircraft operators shall not be required to submit monitoring plans setting out measures to monitor and report emissions in respect of flights which are subject to the derogations provided for in points (a) and (b) of paragraph 1 of this Article.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28a-6">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011 first">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
6
</ins>
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011">By way of derogation from Articles 3g, 12, 15 and 18a, where an aircraft operator has total annual emissions lower than </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011">25 000</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011"> tonnes of CO</ins>
</ins>
</ins>
<sub>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011">2</ins>
</ins>
</ins>
</sub>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011">, or where an aircraft operator has total annual emissions lower than </ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011">3 000</ins>
</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011"> tonnes of CO</ins>
</ins>
</ins>
<sub>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011">2</ins>
</ins>
</ins>
</sub>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011"> from flights other than those referred to in points (a) and (b) of paragraph 1 of this Article, its emissions shall be considered to be verified emissions if determined by using the small emitters tool approved under Commission Regulation (EU) No 606/2010</ins>
</ins>
</ins>
<noteRef href="#f00026" class="footnote" marker="26"/>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M011 last"> and populated by Eurocontrol with data from its ETS support facility. Member States may implement simplified procedures for non-commercial aircraft operators as long as such procedures provide no less accuracy than the small emitters tool provides.</ins>
</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28a-7">
<num>
<ins class="substitution O004001M037">
<ins class="O007001M001">
<ins class="substitution O009001M012 first">
<noteRef href="#c000009" marker="F9" class="commentary attribute F"/>
7
</ins>
</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O007001M001 last">
<ins class="substitution O009001M012 last">Paragraph 1 of this Article shall apply to countries with whom an agreement pursuant to Article 25 or 25a has been reached only in line with the terms of such agreement.</ins>
</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28a-8">
<num>
<noteRef href="#c000018" marker="F16" class="commentary F"/>
8
</num>
<content>
<p>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</p>
</content>
</paragraph>
</article>
<article eId="article-28b" period="#period5">
<num>
<ins class="substitution O004001M037">
<ins class="O009001M014">Article 28b</ins>
</ins>
</num>
<heading>
<ins class="substitution O004001M037">
<ins class="O009001M014 first">
<noteRef href="#c000008" marker="F8" class="commentary attribute F"/>
Reporting and review by the Commission concerning the implementation of the ICAO's global market-based measure
</ins>
</ins>
</heading>
<paragraph eId="article-28b-1">
<num>
<ins class="substitution O004001M037">
<ins class="O009001M014">1</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O009001M014">Before </ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O009001M014">1 January 2019</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O009001M014"> and regularly thereafter, the Commission shall report to the European Parliament and to the Council on progress in the ICAO negotiations to implement the global market-based measure to be applied to emissions from 2021, in particular with regard to: (i) the relevant ICAO instruments, including Standards and Recommended Practices; (ii) ICAO Council-approved recommendations relevant to the global market-based measure; (iii) the establishment of a global registry; (iv) domestic measures taken by third countries to implement the global market-based measure to be applied to emissions from 2021; (v) the implications of reservations by third countries; and (vi) other relevant international developments and applicable instruments.</ins>
</ins>
</p>
<p>
<ins class="substitution O004001M037">
<ins class="O009001M014">In line with the UNFCCC's global stocktake, the Commission shall also report on efforts to meet the aviation sector's aspirational long-term emissions reduction goal of halving aviation CO</ins>
</ins>
<sub>
<ins class="substitution O004001M037">
<ins class="O009001M014">2</ins>
</ins>
</sub>
<ins class="substitution O004001M037">
<ins class="O009001M014"> emissions relative to 2005 levels by 2050.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28b-2">
<num>
<ins class="substitution O004001M037">
<ins class="O009001M014">2</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O009001M014">Within 12 months of the adoption by the ICAO of the relevant instruments, and before the global market-based measure becomes operational, the Commission shall present a report to the European Parliament and to the Council in which it shall consider ways for those instruments to be implemented in Union law through a revision of this Directive. The Commission shall, in that report, also consider the rules applicable in respect of flights within the EEA, as appropriate. It</ins>
</ins>
<ins class="substitution O004001M037">
<ins class="O009001M014"> shall also examine the ambition and overall environmental integrity of the global market-based measure, including its general ambition in relation to targets under the Paris Agreement, the level of participation, its enforceability, transparency, the penalties for non-compliance, the processes for public input, the quality of offset credits, monitoring, reporting and verification of emissions, registries, accountability as well as rules on the use of biofuels. In addition, the report shall consider whether the provisions adopted under Article 28c(2) need to be revised.</ins>
</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-28b-3">
<num>
<ins class="substitution O004001M037">
<ins class="O009001M014">3</ins>
</ins>
</num>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O009001M014">The Commission shall accompany the report referred to in paragraph 2 of this Article with a proposal, where appropriate, to the European Parliament and to the Council to amend, delete, extend or replace the derogations provided for in Article 28a, that is consistent with the Union economy-wide greenhouse gas emission reduction commitment for 2030 with the aim of preserving the environmental integrity and effectiveness of Union climate action.</ins>
</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-28c" period="#period6">
<num>
<ins class="substitution O004001M037">
<ins class="O009001M014">
<ins class="substitution O010001M202">Article 28c</ins>
</ins>
</ins>
</num>
<heading>
<ins class="substitution O004001M037">
<ins class="O009001M014">
<ins class="substitution O010001M202 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Provisions for monitoring, reporting and verification for the purpose of the global market-based measure
</ins>
</ins>
</ins>
</heading>
<content>
<p>
<ins class="substitution O004001M037">
<ins class="O009001M014 last">
<ins class="substitution O010001M202 last">The Commission is empowered to adopt delegated acts in accordance with Article 23 to supplement this Directive concerning the appropriate monitoring, reporting and verification of emissions for the purpose of implementing the ICAO's global market-based measure on all routes covered by it. Those delegated acts shall be based on the relevant instruments adopted in the ICAO, shall avoid any distortion of competition and be consistent with the principles contained in the acts referred to in Article 14(1), and shall ensure that the emissions reports submitted are verified in accordance with the verification principles and criteria laid down in Article 15.</ins>
</ins>
</ins>
</p>
</content>
</article>
<article eId="article-29" period="#period4">
<num>
<ins class="substitution O004001M037">Article 29</ins>
</num>
<heading>
<ins class="substitution O004001M037">Report to ensure the better functioning of the carbon market</ins>
</heading>
<content>
<p>
<ins class="substitution O004001M037 last">If, on the basis of the regular reports on the carbon market referred to in Article 10(5), the Commission has evidence that the carbon market is not functioning properly, it shall submit a report to the European Parliament and to the Council. The report may be accompanied, if appropriate, by proposals aiming at increasing transparency of the carbon market and addressing measures to improve its functioning.</ins>
</p>
</content>
</article>
<article eId="article-29a" period="#period6">
<num>
<ins class="O004001M038">Article 29a</ins>
</num>
<heading>
<ins class="O004001M038 first">
<noteRef href="#c000003" marker="F3" class="commentary attribute F"/>
Measures in the event of excessive price fluctuations
</ins>
</heading>
<paragraph eId="article-29a-1">
<num>
<ins class="O004001M038">1</ins>
</num>
<content>
<p>
<ins class="O004001M038">If, for more than six consecutive months, the allowance price is more than three times the average price of allowances during the two preceding years on the European carbon market, the Commission shall immediately convene a meeting of the Committee established by Article 9 of Decision No 280/2004/EC.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-29a-2">
<num>
<ins class="O004001M038">2</ins>
</num>
<intro>
<p>
<ins class="O004001M038">If the price evolution referred to in paragraph 1 does not correspond to changing market fundamentals, one of the following measures may be adopted, taking into account the degree of price evolution:</ins>
</p>
</intro>
<subparagraph eId="d4e5360">
<num>
<ins class="O004001M038">a</ins>
</num>
<content>
<p>
<ins class="O004001M038">a measure which allows Member States to bring forward the auctioning of a part of the quantity to be auctioned;</ins>
</p>
</content>
</subparagraph>
<subparagraph eId="d4e5368">
<num>
<ins class="O004001M038">b</ins>
</num>
<content>
<p>
<ins class="O004001M038">a measure which allows Member States to auction up to 25 % of the remaining allowances in the new entrants reserve.</ins>
</p>
</content>
</subparagraph>
<wrapUp>
<p>
<ins class="O004001M038">Those measures shall be adopted in accordance with the management procedure referred to in Article 23(4).</ins>
</p>
</wrapUp>
</paragraph>
<paragraph eId="article-29a-3">
<num>
<ins class="O004001M038">3</ins>
</num>
<content>
<p>
<ins class="O004001M038">Any measure shall take utmost account of the reports submitted by the Commission to the European Parliament and to the Council pursuant to Article 29, as well as any other relevant information provided by Member States.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-29a-4">
<num>
<ins class="O004001M038">4</ins>
</num>
<content>
<p>
<ins class="O004001M038">The arrangements for the application of these provisions shall be laid down in the </ins>
<ins class="O004001M038">
<ins class="substitution O010001M145 first last">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
acts
</ins>
</ins>
<ins class="O004001M038 last"> referred to in Article 10(4).</ins>
</p>
</content>
</paragraph>
</article>
<article eId="article-30" period="#period6">
<num>
<ins class="substitution O010001M203">Article 30</ins>
</num>
<heading>
<ins class="substitution O010001M203 first">
<noteRef href="#c000001" marker="F1" class="commentary attribute F"/>
Review in the light of the implementation of the Paris Agreement and the development of carbon markets in other major economies
</ins>
</heading>
<paragraph eId="article-30-1">
<num>
<ins class="substitution O010001M203">1</ins>
</num>
<content>
<p>
<ins class="substitution O010001M203">This Directive shall be kept under review in the light of international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-30-2">
<num>
<ins class="substitution O010001M203">2</ins>
</num>
<content>
<p>
<ins class="substitution O010001M203">The measures to support certain energy-intensive industries that may be subject to carbon leakage referred to in Articles 10a and 10b shall also be kept under review in the light of climate policy measures in other major economies. In this context, the Commission shall also consider whether measures in relation to the compensation of indirect costs should be further harmonised.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-30-3">
<num>
<ins class="substitution O010001M203">3</ins>
</num>
<content>
<p>
<ins class="substitution O010001M203">The Commission shall report to the European Parliament and to the Council in the context of each global stocktake agreed under the Paris Agreement, in particular with regard to the need for additional Union policies and measures in view of necessary greenhouse gas reductions by the Union and its Member States, including in relation to the linear factor referred to in Article 9. The Commission may make proposals to the European Parliament and to the Council to amend this Directive where appropriate.</ins>
</p>
</content>
</paragraph>
<paragraph eId="article-30-4">
<num>
<ins class="substitution O010001M203">4</ins>
</num>
<content>
<p>
<ins class="substitution O010001M203">Before </ins>
<ins class="substitution O010001M203">1 January 2020</ins>
<ins class="substitution O010001M203">, the Commission shall present an updated analysis of the non-CO</ins>
<sub>
<ins class="substitution O010001M203">2</ins>
</sub>
<ins class="substitution O010001M203 last"> effects of aviation, accompanied, where appropriate, by a proposal on how best to address those effects.</ins>
</p>
</content>
</paragraph>
</article>
</chapter>
<chapter eId="chapter-V" period="#period3">
<num>
<ins class="O002001M030 first">
<noteRef href="#c000002" marker="F2" class="commentary attribute F"/>
CHAPTER V
</ins>
</num>
<heading>
<ins class="O002001M030 last">FINAL PROVISIONS</ins>
</heading>
<article eId="article-31" period="#period1">
<num>Article 31</num>
<heading>Implementation</heading>
<paragraph eId="article-31-1">
<num>1</num>
<content>
<p>Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 2003 at the latest. They shall forthwith inform the Commission thereof. The Commission shall notify the other Member States of these laws, regulations and administrative provisions.</p>
<p>When Member States adopt these measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.</p>
</content>
</paragraph>
<paragraph eId="article-31-2">
<num>2</num>
<content>
<p>Member States shall communicate to the Commission the text of the provisions of national law which they adopt in the field covered by this Directive. The Commission shall inform the other Member States thereof.</p>
</content>
</paragraph>
</article>
<article eId="article-32" period="#period1">
<num>Article 32</num>
<heading>Entry into force</heading>
<content>
<p>
This Directive shall enter into force on the day of its publication in the
<em>Official Journal of the European Union</em>
.
</p>
</content>
</article>
<article eId="article-33" period="#period1">
<num>Article 33</num>
<heading>Addressees</heading>
<content>
<p>This Directive is addressed to the Member States.</p>
</content>
</article>
</chapter>
</portionBody>
</portion>
</akomaNtoso>