9th February 2004 - Trucost Briefing - EU Emissions Trading Scheme: UK Draft National Allocation Plan for 2005-7

Trucost analyses the UK National Allocation Plan, the UK Government's draft allocation proposals under the EU Emissions Trading Scheme, which will come into force on 1st January 2005. Trucost's research leads to three conclusions:

1. The impact of UK electricity prices as a result of the Scheme's introduction has probably been overstated by market research to date. We expect electricity generation costs to rise by only 5% with a price of allowances of €12/tonne. This translates to a 2.9% increase in industrial and 1.4% increase in domestic electricity prices.

2. The competitive threat to UK business as detailed by some trade bodies may have been exaggerated. The UK has the lowest abatement cost of all EU nations with the exception of France, so UK companies are expected to be net sellers of allowances.

3. Draft allocations to installations within the power generation sector appear anomalous. In the attached Briefing (see download), Trucost has identified companies that it thinks are likely to be disadvantaged by the draft NAP, and indeed, those which are best positioned to benefit from the allocations as they stand.

For more information contact:
T: +44 207 321 3833.
info@trucost.com

You can download this article in Adobe Acrobat format (.pdf) by clicking on the link to the right.

If you would like to receive Trucost research on related subjects as it is published, please click here to subscribe to our Newsletter