Dóra Fazekas Carbon Market Implications for new EU - UniCredit ...

The Hungarian National Allocation Plan for the pilot phase had an emissions cap of 94.98 Mt CO2
for the period 2005-2007, with a 2% New Entrant Reserve, and a 2.5% auction reserve (see table
15). In the Hungarian NAP, 55.6% of the total quantity was grandfathered to the energy sector,
represented by 18 installations; the market is thus rather concentrated. During the pilot phase, the
total allocated emissions amount is comprised of free emissions allowances provided to existing
installations, allowances made available for a cost, and allowances reserved for new entrants and
made available to them for free (Government Decree no. 66/2006, Appendix 1, Section 2).
According to Article 6(2) of Act XV of 2005 on the trading of greenhouse gas emission
allowances, the National Allocation Plan includes the following provisions in addition to its basic
principles:
• the total quantity of emissions allowances created during the trading period:
31,660,907 allowances in the pilot phase per year, totaling 94,982,721 tCO2e
• the total quantity of emissions allowances to be allocated to each sector (see Table 15)
• the total quantity of emissions allowances to be allocated for free
30,869,384 allowances in the pilot phase per year, totaling 92,608,152 tCO2e
• the quantity of emissions allowances to be allocated for a cost
791,523 allowances in the pilot phase per year, totaling 2,374,569 tCO2e
• the preliminary list of installations falling under the Allocation Plan and the quantity of
emissions allowances planned to be allocated for the operators – National Allocation List
• the quantity of reserved allowances to be allocated for free for installations subject to the New
Entrant Reserve: a total of 1,875,960 allowances during the pilot phase, with the quantity
decreasing proportionally every year:
! 2005: 937,980 tCO2e
! 2006: 625,320 tCO2e
! 2007: 312,660 tCO2e
• applicable methods of allocation: allocation for free and auctions.
I/a-
I/b.
Emissions allowances to be allocated to existing installations
free of charge
92
Quantity of emissions
allowances
(CO2 tonnnes/year)
Electricity generation* 16,927,857
I/b. District heating 2,267,091
I/c. Combustion for internal purposes (except for sugar
industry)
2,100,160
I/d. Sugar industry 431,479
II. Mineral oil processing 1,383,170
III. Coking 264,233