Scope for pooling emissions allowances is growing

From all installations that received allocations, 55% of them have less than 25kton CO2 emissions. They were issued 2,5% of the allowances. To give these smaller companies more CO2 market power and to minimize cost and administration for individual companies pooling is an option. This is a provision under the EU ETS (Art 28), but can also be undertaken informally, comparable with joint power purchasing. The total allocation will be issued to a nominated Trustee; that will than on behalf of a group of companies consolidate the allowances and do trades to optimize the compliance and asset situation. Risk and cost can be minimized, making use of spot transactions, OTC or by using platforms, but also futures can be used.
The recent evaluation report of the European Environment Agency shows that that only 21 applications to form a pool have been received from operators in 6 Member States; they came from 6 sectors.

In one Member State all three applications to form a pool were later withdrawn. In Finland and Sweden the law doesn't include the pooling provision. Against the background of more installations being covered - in the Netherlands small installations could opt out until 2007 - and the new 5-year allocation period, I believe that pooling will be used more often. It requires less administrative, legal and financial labour and can be beneficial for all. Especially in the Dutch horticulture sector, smaller breweries and bricks producers pooling is an opportunity being considered.