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NORTH EAST LAW REVIEW 163 Number of allowances allocated free of charge for O = CLEF × n × 56.1 tonnes of CO2 / terajoule of fuel consumed preliminary annual number of emission allowances The so-called process emissions benchmark applies in cases where emissions are neither covered by a product benchmark nor by the heat or fuel benchmark approach.57 Here, the amount of allowances allocated free of charge is based on historical emissions.58 However, the value is reduced to 97% ‘[i]n order to ensure that the free allocation of emission allowances for such emissions provides sufficient incentives for reductions in greenhouse gas emissions and to avoid any difference in treatment’59. = CLEF × 0.97 × Historical process emissions preliminary annual number of emission allowances 3.3 Summary Based on the general premise of a gradual reduction of the total number of allowances available, the portrayed scheme applies a finely tuned system of hierarchical methods that are linked to best practice as far as such a link was deemed feasible, and which refer to historical emission levels only as a fall-back approach. At the same time, it is a dubious masterpiece of European technocracy and bureaucracy which is difficult to apply to a specific case. Against this background, the next section will analyse how the ETS system is applied to waste heat electricity. 4 APPLICATION OF THE ETC SCHEME TO WASTE HEAT ELECTRICITY 4.1 Waste Heat Gases Under the ETS The generation of waste heat electricity does not cause the emission of any additional greenhouse gases. Therefore, it is not directly subject to the emission trading scheme. What has to be examined instead is the application of the ETS to the hot gas the electricity is generated from: Regardless of the product-based efficiency benchmark that is used to calculate the amount of allowances allocated for free, the emission trading scheme itself only looks at the greenhouse gas emissions from the producing installation. In that context, it should be stressed that the hot off-gas (i.e. the waste heat 57 DG-CLIMA, Guidance Document 2 (2011) para 1.5. 58 Benchmarking Decision (n 5), art 10(2)(b)(iii). 59 Benchmarking Decision (n 5), rec (12). Number of allowances allocated free of charge for OPDF Image | ELECTRICITY PRODUCTION FROM INDUSTRIAL WASTE HEAT
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