FURTHER INFORMATION:

As a member of the EU, Ireland is committed to an average increase of greenhouse gas emissions by 13% above 1990 levels (Ireland was given an increase of 13% rather than the EU wide goal of a reduction of 8% over 1990 levels). The EU Emissions Trading Directive (Directive 2003/87/EC), implemented in Ireland by the European Communities (Greenhouse Gas Emissions Trading) Regulations (SI No. 437 of 2004), which establishes an allowance-trading scheme for emissions to promote reductions of greenhouse gases, in particular carbon dioxide, is being implemented by the Environmental Protection Agency (EPA) to achieve this target.

Annex 1 of the Directive sets out which activities will be covered by the scheme. Thresholds set in the Directive are based on capacity rather than actual output and on the accumulative capacity of all directly associated and technically connected facilities on sites. CHP plants are "Energy Activities" and will come under the scheme where they have a rated thermal input exceeding 20 MW (except in the case of hazardous or municipal waste installations).

Installations that fall within this "permit required" threshold will not be able to operate legally after the 1st of January 2005 until a permit has been issued.

The EPA will not grant a permit until after the installation has obtained all necessary consents to commence construction, which for CHP would include Planning Permission (where required) and a CER Authorisation to Construct. There is no fee involved in the application for a permit. The estimated timescale for the processing of permit applications is one month.

The allowance-trading scheme operates by providing each installation with some free allowances, but these allowances may not be sufficient to cover the actual emission levels. In such instances, the operator will be required to either reduce their electrical/heat demand (and therefore their CO2 emissions) or source extra allowances from the market place.

The first phase of the trading scheme will run from January 2005 to December 2007, with second and subsequent phases running from 2008 in five-year periods. During the first phase, allowances for installations that had obtained a greenhouse gas emissions permit before 31st March 2004 are described in the National Allocation Plan for the period 2005 to 2007 and are based on historic emissions.

Other CHP installations that come into operation during this period, but which obtain a permit after 31st March 2004, may apply for an allocation from a reserve of allowances set-aside for CHP. This application must be made to the EPA. Together with the construction consents described above, the operator must have obtained an Electricity Connection Agreement with ESB National Grid before an application can be made. Allocations are made on a first come-first served basis. 450,000 allowances (tonnes CO2 equivalent) have been set-aside for the first phase, split into annual proportions of 1:2:3 for the first three years. In years one and two, the most allowance that one can obtain is 37,500. A higher amount may be allocated in year three.

Allowances set-aside for CHP in recognition of its environmental benefits are made on the following basis:

• New CHP plants will receive allowances for both the electricity generation and the heat elements of the process
• Displacement CHP plants (which involves the replacing of existing boilers) will receive an allowance for the electricity generation part and will be permitted to retain the heat allowance that existed for the boiler.
  
  
  

Allowances are allocated after the permit has been granted, and by the end of February in each trading year or, where first allocation within a month or two of first obtaining a permit. Allowances for subsequent trading phases after 2008 will be made in accordance with allocation plans developed at least 18 months before each subsequent trading phase begins.

Emission of certain pollutants from large combustion plants Directive 2001/80/EC

Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emission of certain pollutants into the air from large combustion plants has been transcribed into Irish legislation by the Statutory Instrument 644 of 2003 Large Combustion Plants Regulations 2003 (S.I. No 644 of 2003). The conditions set down in these regulations apply to combustion plants with a rated thermal input of 50 MW or greater, irrespective of the type of fuel used. Therefore any CHP plants in existence or built in the future with a rated thermal input of 50 MW or greater, will have to meet the emission limit values set out in the first and second schedule of the regulations. The Regulations set differing emission limit values for sulphur dioxide, oxides of nitrogen and dust to be applied, depending on plant type and the fuel used i.e. solid, liquid and gaseous fuels.

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