Czech government backs moving emissions allowance surrender deadline to 30 September

The government today backed moving the deadline by which companies must surrender emissions allowances for emissions released in the previous year. This is also the deadline by which companies must buy the required number of allowances. Michal Šalomoun (Pirates), chair of the Government Legislative Council, told reporters after the cabinet meeting. He said the proposal would ease the pressure on industrial companies that have to buy allowances.

A group of coalition MPs, joined by two ANO MPs, proposed in the Chamber of Deputies that the deadline be moved from 30 April to 30 September. They were responding to an amendment to the European directive that shifts the deadline. The Chamber of Deputies can now begin considering the proposal. The price of allowances is one of the factors that feed into energy prices.

Emissions allowances are bought by power plants and other industrial companies that release greenhouse gases into the atmosphere, such as carbon dioxide. One allowance entitles a company to release one tonne of carbon dioxide, or an equivalent amount of another gas, into the atmosphere. The law requires the companies concerned to surrender allowances corresponding to the emissions they have released. The amended EU directive already provides for moving the date from April to September, but the MPs sponsoring the proposal say the relevant legislation has not yet been submitted.

If the deadline for surrendering allowances were moved, companies could spread their purchases over a longer period. „Companies will thus be able to spread their purchases over a longer period, which will have a positive impact on their cash flow,“ the explanatory memorandum says. The MPs have proposed that the Chamber of Deputies approve their proposal under an accelerated procedure, at first reading.

The European Emissions Trading System is the EU’s main tool for reducing greenhouse gas emissions. It sets limits on the total amount of greenhouse gases that sectors covered by the system can emit, while also allowing companies to obtain or buy emissions allowances, which can be traded as needed. When allowance prices rise, companies have greater incentive to try to reduce emissions.