The European Business Council for Sustainable Energy, e5, has slammed the German national allocation plan (NAP), claiming that within the power generation sector it significantly counters the idea of emissions trading as a tool to reduce emissions at a low cost, as well as the imperative of free competition. In a position paper on Germany’s allocation plan, e5 concluded that since the plan uses different benchmarks for coal and gas based power generation, coal fired power plants get a much higher incentive per ton of reduced CO2 than gas-fired ones. The business organization also claimed that the German NAP discriminates against potentially highly energy efficient newcomers. Grandfathering in general should allow the further operation of existing plant under the slight pressure of the fulfilling factor. It should not establish a competitive advantage on the base of high historical emissions, it said. The actual transmission rule is only available for operators of old plants, although e.g., building high efficiency cogeneration by new competitors could lead to higher reductions at lower costs. The actual draw of the NAP discriminates newcomers against operators of existing older power plants with high specific emissions. e5 also proposes to feed unused certificates for old power plants back to the reserve, which would result in higher fulfilling factors.
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