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162 WASTE HEAT AND EUROPEAN CLEAN ENERGY POLICIES 3.2.3 Fall-back Methods In cases where time or data or the number of installations concerned was insufficient to establish benchmarks on a product basis,47 the preliminary annual number of emission allowances is determined by a hierarchy of fall-back methods, namely (i) the heat benchmark, (ii) the fuel benchmark and (iii) process emissions.48 The heat benchmark applies in cases where no product benchmark has been defined to determine the preliminary annual number of emission allowances, but measurable heat is either consumed for a specific purpose (e.g. production or heating) in an ETS installation, or produced in an ETS installation and consumed by a non-ETS installation (to avoid double counting).49 ‘The benchmark here for 100% free allocation is the efficient production of heat using low-carbon natural gas’50, which is set at 62.3 tonnes of CO2 per terajoule of heat energy consumed.51 Again, the preliminary amount of allowances is the product of the benchmark times the historical activity level of the respective installation n.52 Under the heat benchmark approach, however, the benchmark does not refer to a number of products produced, but to the amount of measurable heat consumed during the baseline period, expressed as terajoule per year.53 preliminary annual number of emission allowances The fuel benchmark applies in cases where a product benchmark is not available and heat produced by fuel combustion is consumed for a certain purpose (i.e. heating, cooling, mechanical energy or production) in amounts not measurable.54 The benchmark is set at 56.1 tonnes CO2 per energy content of the fuel consumed, expressed in terajoule.55 The historical activity level of the respective installation n refers to the amount of fuel consumed during the baseline period.56 47 ENDS Report Environment Daily, 'Commission finalises phase III EU ETS benchmark criteria' < http://www.endsreport.com/index.cfm?go=27015> (accesed 4 May 2012). 48 Benchmarking Decision (n 5), rec (12). 49 Benchmarking Decision (n 5) art 3(c); see also DG-CLIMA, 'Guidance Document no2 on the harmonized free allocation methodology for the EU-ETS post 2011 – Guidance on allocation methodologies' (Guidance Document 2) (2011) para 1.5. 50 ENDS (n 47); Commission, 'Accompanying document to the Commission Decision on determining transitional Union-wide rules for harmonised free allocation pursuant to Article 10a of Directive 2003/87/EC' (Staff Working Document) SEC(2010) para 4.1.2. 51 Benchmarking Decision (n 5), Annex I(3). 52 Benchmarking Decision (n 5), art 10(2)(b)(i). 53 Benchmarking Decision (n 5), art 9(3). 54 Benchmarking Decision (n 5), art 3(d). 55 Benchmarking Decision (n 5), Annex I(3). 56 Benchmarking Decision (n 5), art 9(4). Number of allowances allocated free of charge for O 62.3 tonnes of CO2 / terajoule of heat energy consumed = CLEF × n ×PDF Image | ELECTRICITY PRODUCTION FROM INDUSTRIAL WASTE HEAT
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