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Meet the Law | Legal regime for greenhouse gas emissions and license trading

DL 12/2020, of 6th of April

Decree-Law No 12/2020 of 6th of April 2020, which establishes the legal framework for greenhouse gas emissions and license trading (hereinafter "GHG") for the period 2021-2030, was published, transposing into national law Directive (EU) 2018/410 of the European Parliament and of the Council of 14th March 2018.

The scope of this diploma is permanent installations carrying out activities under the European Emission Trading Scheme regime (hereinafter 'EU ETS'), as defined in Annex II, such as the combustion of fuels in installations with a total rated thermal input exceeding 20 MW, the refining of mineral oils, production of coke, metal ore roasting or sintering plants, production of pig iron or steel, production or processing of ferrous metals, production of primary aluminium, resulting in the emission of GHG, i.e. carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons or sulphur hexafluoride.

Of the changes introduced by the Decree-Law, the rules for adjusting the annual amounts of emission licences to be allocated free of charge, which are changed in order to obtain a better alignment with the annual production levels, taking into account both the relevant increases and decreases in production., are particularly noteworthy.

It is also foreseen to optionally exclude low emissions installations (up to 25 000 tCO2eq) from the EU ETS, provided that they are subject to measures allowing an equivalent contribution of emissions reduction, or very low emissions installations (up to 2 500 tCO2eq), without any equivalent measure.

This Decree-Law also promotes the decarbonisation of the most GHG-emitting industrial installations, by penalising excess emissions, increase of cost-effectiveness of emissions reduction, investment in low-carbon technologies and reduction, in a more significant way, of the quantity of emission licenses issued annually, thus contributing to the fight against climate change.

Finally, in order to ensure the normal operation of the EU ETS regime, in the period from 2013 to 2020, this law establishes as transitional provisions, the rules of Decree-Law no. 38/2013, of 14th of March, relating to emission licences, within the competence of the Portuguese Environment Agency and activity data communication, establishing that they remain in force until 31st of December 2020. Similarly, in the provisions relating to procedures, such as the assessment of applications for access to the reserve of emission licenses for new installations, submission of documentation for specified installations, application of penalties for excess emissions and infractions, it was established that they remain in force until their conclusion.

This Decree-Law enters into force on 7th of April 2020 and revokes Decree-Law No. 38/2013 of 15th of March, as currently worded and Decree-Law No. 10/2019 of 18th of January.

This Decree-Law can be consulted here.

Authors

Picture of Monica Pacheco
Mónica Carneiro Pacheco
Partner
Lisbon
Picture of Bernardo Cunha Ferreira
Bernardo Cunha Ferreira
Associate
Lisbon
Rita Guimarães Neto
Rita Guimarães Neto