Czech president signs five-month delay to emissions allowance surrender deadline

Companies will be able to surrender emissions allowances for emissions released into the atmosphere in the previous year by 30 September. Until now, they had to do so by 30 April. President Petr Pavel has signed the five-month postponement. The Presidential Office announced this today. The postponement also applies to the deadline by which companies must purchase the required number of allowances. This will allow them to spread their purchases over a longer period. The price of allowances is one of the factors reflected in energy prices.

The amendment to the rules on trading greenhouse gas emission allowances was submitted by a group of coalition MPs and two MPs from the opposition ANO movement in response to the same change to an EU directive. The change was prepared by the Ministry of the Environment, but the government would not have been able to pass the proposal in time. Companies would therefore have had to purchase and surrender allowances by 30 April this year.

Emissions allowances are purchased by power plants and other industrial companies that release greenhouse gases, such as carbon dioxide, into the atmosphere. One allowance entitles a company to emit one tonne of carbon dioxide, or an equivalent amount of another gas. The law requires the companies concerned to surrender allowances equal to the emissions they release.

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 may emit, while allowing companies to obtain or purchase emissions allowances, which can be traded as needed. When allowance prices rise, companies have greater incentive to try to reduce emissions. This year’s revenues from allowances are estimated to exceed CZK 40 billion.