To ask the Secretary of State for Environment, Food and Rural Affairs (1) what the UK Government’s assessment is of the effectiveness of (a) the total level of permitted emissions and (b) the national distribution of permits under the EU Emissions Trading scheme; (142108)

In Phase I (2005-07) of the EU Emissions Trading scheme (EU ETS), the UK National Allocation plan (NAP) is set to deliver emission savings of 65 million tonnes of carbon dioxide (CO₂). For Phase II (2008-12), our cap is set to deliver emission savings of 145 million tonnes of CO₂ over a five year period. Overall, the EU member states have to date emitted around 220MtCO₂ below the total cap.

The results to date have shown the trading mechanism and institutional framework is viable and functioning as envisaged. We believe this is a solid base on which to build for the future. In the UK, compliance has been excellent. In 2006, all operators surrendered sufficient allowances within the deadlines. There have been no successful legal challenges to the national distribution of allowances.

In Phase II, the cap on the total number of allowances allocated to installations in the UK will be 246.17 million allowances (tonnes of CO₂) each year. The EU ETS however, is a trading scheme and under the scheme rules, operators may emit more or less than the allocated amount and purchase or sell allowances to meet their requirements.