The Danish National Allocation Plan
The government’s vision is for Denmark to become independent of fossil fuels in the long term. As a step towards achieving this vision, Denmark is striving to reduce its greenhouse gas emissions. Under the Kyoto Protocol, Denmark has committed to reducing its emissions of greenhouse gases by 21% in the period 2008-2012 relative to the 1990 level. Danish adjusted carbon emissions have fallen by more than 13% since 1990.
CO2 allowances - a cap on emissions
In continuation of the commitments following from the Kyoto Protocol, a common emission trading system was established in the EU, entitled the European Union Greenhouse Gas Emission Trading Scheme (EU ETS).
This was the first international trading system for carbon emission allowances. The EU ETS applies for all 27 EU Member States, and from 2008 for the EEA countries as well (i.e. Iceland, Norway and Lichtenstein). The EU ETS covers more than 10,000 companies, which together accounts for 40% of the EU’s total CO2 emissions. Around 380 Danish installations are covered by the emission regulations.
For the period 2008-2012, the emission trading system includes a cap on the number of emission allowances. Within this cap, allowances and credits may be traded.
Each EU Member State must prepare a National Allocation Plan (NAP), which is subject to approval by the European Commission. The plan should describe the country’s general climate efforts and allowance allocation.
Furthermore, EU Member States are subject to a number of reporting obligations in relation to the EU.
CO2 credits - cooperation with other countries
In addition to trading in CO2 allowances, the Kyoto Protocol provides companies access to buying credits via climate projects in other countries.
In February 2007, Denmark adopted its JI/CDM strategy which describes Denmark’s planned climate efforts in Eastern Europe and in developing countries. JI stands for Joint Implementation and CDM for Clean Development Mechanism.
The EU defines a limit on the use of credits. This is done to ensure that EU Member States and companies only use JI and CDM credits as a supplement to implementing national reductions.
The Emission Trading Scheme after 2013
The Kyoto agreement runs until 2012. The goal is to reach an agreement on a replacement for the Kyoto agreement at the UN Climate Conference (COP15) in Copenhagen in December 2009, i.e. a new agreement for the period 2013-2020.
With the adoption of its climate and energy package in December 2008, the EU has already laid the tracks for EU after 2012, also in relation to the emission trading system. The concept of national allocation plans will be discontinued from 2013 and will be replaced by harmonised allowance allocation determined at central level.
The EU’s climate and energy package realises the binding targets which the European Council set up at its March 2007 Spring Summit on combating climate change and promoting renewable energy.
The goal is to reduce greenhouse gas emissions in the EU to at least 20% below the 1990 level; increase the share of renewables in energy consumption to 20% by 2020; and increase the share of renewable forms of energy in the transport sector to 10% by 2020. Denmark’s share of renewables in energy consumption must reach 30% by 2020.