Friday, November 30, 2012

Parliament approved new emission law, revenues distribution outlined



On Tuesday (November 28) new law on the on the auctioning of greenhouse gas emission quotas has passed through the National Council of the Slovak Republic.

From 2013 onwards the system will change significantly as to reflect new EU harmonized rules. So far the industry sector has received emissions allowances free of charge. Based on the new EU rules some companies, especially thosse in the energy sector, will be obliged to purchase EU emission allowances (EUA). Manufacturing companies should receive a portion of them free of charge while purchasing another portion.

The environment minister Peter Ziga estimated that in 2013 revenues obtained from auction of EUAs might be approx. € 105 million. Total of 32,2 Mt CO2 have been allocated for Slovak companies next year, half of it will be purchased.

Cutting pie

The new law does not specify concrete projects or funds via which the revenues will be chanelled. Every year in September ministries of environment and of finance will decide on their specific use. However, some portions have been decided.


  • 50 % of the auction revenues will be used on big infrastructure projects with value over €200.000. They will require notification from the European Commission first. The money will be used as loans or grants for purchase of new or renovation of existing technologies and equipment with the purpose to decrease the CO2 emissions. 
  • 10 % will be used as compensation in sectors with the risk of so-called carbon leakage. According to the minister it might apply to 5 or 6 companies. 
  • 20 % should be used to mitigate negative impacts of climate change, e.g. projects of flood control.
  • Last 20 % will be used for de minimis projects, such as insulation of building or various energy efficiency programs. 


Eco displeasure

Environmental groups expressed their discontent with the approved law since they were urging politicians to us the revenues for climate projects and creation of green jobs. (See more here)

“Although the law contains proposal of revenues´ distribution it allows to minister of finance and minister of environment to agree every September that most or all of these revenues will end up as coverage of the budget deficit,” coordinator of Greenpeace climate campaign Pavol Siroky said. “The law also counts on further support for polluters, thus companies who are paying these fees themselves.”

He added: “We don’t see a logical reason why to give them further support from the state budget since they will not purchase all their emission allowances. They will receive them free of charge and the rest might be covered by transferring the over-allocation from previous periods.”

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