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What it is

How Spain's greenhouse gas emission allowance trading market works

BOE step 7 of 7 · Passed

It is a royal decree-law. It was introduced on 27 August 2004. Introduced by: Gobierno.

Official title: Royal Decree-Law 5/2004, of August 27, regulating the trading scheme for greenhouse gas emission allowances.

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Source: Congreso de los Diputados, file 130/000005· updated 11 Nov

Automatic summary, not yet reviewed

  1. The rule creates an emission allowance market: each allowance allows the holder to emit one tonne of carbon dioxide equivalent and can be bought and sold. It is only valid for the period of each national allocation plan.
  2. Installations listed in Annex I (energy, refining, metals, cement, lime, glass, ceramics, paper) need a greenhouse gas emission permit, granted by the regional government. If three months pass with no answer, the application is deemed denied.
  3. The national allocation plan sets how many allowances are distributed in each period (the first one lasting three years from 2005, the following ones five years) and how they are assigned. Allocation for the first period is free; for the second, 90 percent is free and the remaining 10 percent as set by the plan.
  4. Operators must monitor and verify their emissions and submit a verified report each year by February 28. By April 30 they must surrender allowances equal to their verified emissions; otherwise they face fines of 100 euros per excess tonne (40 euros during 2005-2007).
  5. The national registry of emission allowances is created, where all operations (issuance, ownership, transfer, surrender, cancellation) are recorded. It is public, attached to the Ministry of the Environment, and connects with the European Commission's central administrator to suspend irregular transactions.
  6. Several installations of the same activity can group together to jointly meet the surrender obligation, with a single trustee administrator. In the electricity sector, grouping is not allowed during 2005-2007, and offenses are classified as very serious, serious and minor, with fines of up to two million euros.

Who it affects

  • Operators of industrial and energy installations listed in Annex I: They must apply for an emission permit, monitor and verify their emissions, report annually and surrender allowances equal to what they emit.
  • Companies that want to group installations: They can jointly meet the surrender obligation if the Council of Ministers authorizes it and they appoint a trustee administrator.
  • Regional governments (comunidades autónomas): They grant emission permits, review annual reports and exercise sanctioning power in most cases.
  • Developers of clean development or joint implementation projects: They must obtain a report from the designated national authority so their credits can be used in the European market.
  • Any individual or company that wants to buy allowances: They can take part in transfers if they first open an account in the national registry.

Words worth knowing

Derecho de emisión (emission allowance)
A transferable permit to emit one tonne of carbon dioxide equivalent from an installation covered by the rule.
Plan nacional de asignación (national allocation plan)
A government rule that sets how many emission allowances are distributed in each period and under what criteria.
Administrador fiduciario (trustee administrator)
A person who represents a group of installations and is responsible for surrendering the allowances of all of them.
Nuevo entrante (new entrant)
A new, expanded or modified installation that receives a permit after the national plan is notified to the European Commission.
Real decreto ley (royal decree-law)
A rule with the rank of law that the Government can pass urgently, here to transpose a European directive.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries

Where it stands

How far did it get?

It took 7 of 7 steps. It reached BOE, and today it is passed.

  1. Introduced27 August 2004Someone registers the text in the Congreso.
  2. Admitted7 September 2004The Bureau of the Congreso accepts it and, for a members’ bill, the plenary decides whether to consider it.
  3. Amendmentsno dateGroups propose changes.
  4. Committeeno dateA committee goes through the text in detail.
  5. Plenary7 September 2004All 350 deputies vote.
  6. Senateno dateThe Senate can pass it, amend it or veto it.
  7. BOEno dateIt is published in the Official State Gazette (BOE) and comes into force.
See the 4 official steps on a timeline
Aug 200411. 27 August 2004: Presentación22. 7 September 2004: Calificación33. 7 September 2004: Pleno Convalidación desde 07/09/2004 hasta 16/09/200444. 16 September 2004: Concluido - (Convalidado y tramitado como Proyecto de Ley) desde 16/09/2004 hasta 21/09/2004

Was there a plenary vote?

We have no plenary vote linked to this law in the Congreso’s data.

What happens next

What happens now?

It is law, or will be once published in the BOE. It comes into force on the date its own text sets.

Published in the BOE: Royal Decree-Law 5/2004, of 27 August, regulating the regime for trading in greenhouse gas emission allowances.

Sources

Where does all this come from?

  • The data comes from the open files of the Congreso, the Senate and the BOE, unaltered.
  • Each deputy’s province is the one of their seat on the day of the vote.
  • We only say “passed” or “rejected” when the majority needed is certain; otherwise we say which side had more votes.

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