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Transitional Free Allocation under EU ETS to Modernise Electricity Generation

Daniela Zănescu ()
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Daniela Zănescu: The Bucharest University of Economic Studies

Ovidius University Annals, Economic Sciences Series, 2019, vol. XIX, issue 1, 339-346

Abstract: Investments in the modernisation of the electricity sector in certain lower income EU Member States are supported by the provisions of article 10c of the EU ETS Directive as derogation from the general rule of buying the necessary volume of EU allowances (EUA) thorough the auctioning method from the carbon market. Eight out of ten eligible Member States, including Romania make use of this derogation and allocate to the production of electricity a number of allowances for free if investments for modernization of the energy system are carried out. The objective of the paper is to analyze the benefits and costs when implementing the ETS derogation for the power sector, across EU and in Romania, according to the EU legislation and national procedure. The outcome of the paper is to set up a starting point for further debates and also the development of a point of view/analyse in the field.

Keywords: climate change; EU emission trading scheme (search for similar items in EconPapers)
JEL-codes: Q58 (search for similar items in EconPapers)
Date: 2019
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