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Experiences with the Dutch NOx trading system

This presentation discusses the history, workings, and lessons learned from the Dutch NOx trading system. It provides an overview of the national system, the integration of ETS and NOx trading, goals of NOx emission trading, allocation of allowances, enforcement of NECD, and challenges faced. The presentation concludes with suggestions for the future of the Dutch NOx trading system.

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Experiences with the Dutch NOx trading system

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  1. Experiences with the Dutch NOx trading system • Kees Hoppener • Ministry of Environment • Brussels, 3 April 2009

  2. Contents of the presentations History How it works Lessons learned

  3. Fact and figures National system Started at 1-6-2005 About 350 installations involved: Combustion plants in all industrial installations>20 MWth (i.e. power plants, refineries, chemical plats etc. or 85% of industrial emission) Industrial processes within industrial installations (15% of industrial NOx emissions) glass manufacturing, steel production, nitrogen acid production Strong integration of ETS and NOx- trading (80 – 90 %) caused by fossil fuels

  4. Why NOx emission trading? NOx is difficult as well local as trans-boundary effects Stringent NOx-ceiling (NECD 2010) Request by the industry for more flexible approaches NEPP: more market based instruments Permanent reward for pro-active, good environmental behaviour

  5. a new phenomenon IPPCD gives ELV’s by source= relative approach NECD gives maximum emission ceilings = absolute approach Trading = a solution to distribute space under an emission ceiling or absolute cap

  6. Goals of NOx emission trading Reduction based on cost-effectiveness  Distribution of the costs: the polluter pays Flexible allocation of the room under the NOx-emission ceiling Compliance with the NOx-ceiling Uniformity in practice: one-stop shop

  7. Tough challenges PSR 2010, 40 g/GJ PSR 2020, 27.5 g/GJ ? Bron: Vrom 2006

  8. Allocation of allowances Yearly allocation of NOx allowances based on a Baseline&Credit (B&C) approach performance standard rate (PSR): grams of NOx allowances per unit of energy (GJ) input in the facility or per produced products (ton product) a general binding rule: yearly the value PSR goes downwards 2005: 68 gr/GJ --- 2013: 37 gr/GJ

  9. performance standard rate (PSR)

  10. NOx-emission trading: year by year –similarities with EU ETS compliance requirements Year x x + 1 budget period x Trading period x 1 January 1 January 1a. Submit verified annual emission report 1b. Register the allowances 1c. Confirm of the data by a verifier 31 March 2. Hand in NOx allowances

  11. Measures, sell or buy How does it work? shortage: buy or measures 1200 surplus:Sell or Save permits 1000 800

  12. Balance after 4 years cost-effectiveness? limited by the IPPC-permits Settlement of the costs? Yes there are buyers and sellers Flexible distribution of the available emissions space? allocation of emission allowances functions well Enforcement of NECD? a political linking between allocation and the NECD-ceiling One-stop shop? Dutch emission authority for NOx trading whereas for IPPC industrial installations 20 licensing authority

  13. Is everybody happy: industry Too many allowances in the market Complaining on the burden of monitoring and reports Complaining on double regulation: IPPCD and emission trading Lack of flexibility caused by the command and control approach of the IPPCD

  14. Is everybody happy: authorities High quality of monitoring of NOx – would not have been possible without ETS possibility to enforce the NECD The relation between the IPPC and emission trading is not clear: State Advisory Council took very principled position In 2010 the market is expected to be in balance: the price will rise more incentives The budget period of NECD is too short to provide sufficient support

  15. Future for the Dutch NOx trading system? An European directive to structure NOx-trading would be highly welcomed Emission trading needs room and flexibility under the IPPC Emission trading is the only way to guarantee ambitious objectives in future command and control approach is coming to a dead end for NOx and SOx Special attention for local air quality A long tem budget period under the NECD

  16. Alternatives for trading? Temporary licences: on going sharpening of the ELV’s NOx an SO2 tax system Denying the problem and window dressing

  17. Thanks for your attention Are there any questions? Now Or later: Programme leader Industry & Air pollutionClimate & Air quality DirectorateMinistry of Housing, Spatial Planning and the EnvironmentP.O. box 209512500 EZ The HagueInternal P.O. box 650The Netherlandsphone: 070 -339 4420mobile: 06 - 44 11 27 26@: cees.hoppener@minvrom.nl

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