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NORTH EAST LAW REVIEW 165 Article 12(3) obliges operators to surrender a number of allowances ‘equal to the total emissions from that installation during the preceding calendar year’. It follows that allowances have to be surrendered for all CO2 emitted in the process of generating industrial waste heat. 4.1.2 Free Allowance Allocation for Industrial Waste Heat Gases 4.1.2.1 Product Benchmark It must now be determined to what extent these emissions are eligible for free allowance allocation. As described in the previous section, the Benchmarking Decision provides that, in principle, allowances should be allocated for free in accordance with a product benchmark. However, a survey informing the Benchmarking Decision concluded that: [f]or the (...) non-ferrous metals industry, the relatively small size of the sector in combination with the limited number of installations producing individual products resulted in the proposal not to cover these sectors via product benchmarks, but to apply the fall-back approaches.70 The Commission followed this proposal and refrained from developing a product benchmark for non-ferrous metals, including ferrosilicon. Consequently, these metals are not subject to any product benchmarks. 4.1.2.2 Heat Benchmark In cases where no product benchmark applies, free allowances are allocated according to the heat benchmark. As an additional requirement, the installation needs to consume (a) measurable heat for (b) a specific purpose; alternatively, measurable heat can be exported to a non-ETS installation.71 Measurable heat is defined as ‘a net heat flow transported through identifiable pipelines or ducts using a heat transfer medium, such as, in particular, steam, hot air, water, oil, liquid metals and salts, for which a heat meter is or could be installed’72. The required conditions allow the heat energy to be treated in measurable quantities, making it analogous to a countable product.73 Although such a measurable heat carrier (a) does exist within the processes discussed in this paper, it does not meet the purpose criteria (b) of the heat benchmark as specified in Article 3(c) of the Benchmarking Decision; while some energy escapes through radiation and convection, or remains in the form of heat energy in the end product, or is converted into chemical energy in the end product components, heat energy is carried 70 Ecofys, Fraunhofer Institute for Systems and Innovation Research and Öko-Institut, ‘Methodology for the free allocation of emission allowances in the EU ETS post 2012’ (2009) vii. 71 Benchmarking Decision (n 5), art 3(c). 72 Benchmarking Decision (n 5), art 3(e). 73 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' para 4.1.2.PDF Image | ELECTRICITY PRODUCTION FROM INDUSTRIAL WASTE HEAT
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