Regulation on the allocation of so-called emission credits by the Government Duško Marković adopted in February 2020, will be valid at least until the end of this year, when the minister in the technical mandate Ana Novaković Đurović, as they told "Vijesti", they expect the adoption of the new law on climate and when they will approach the drafting of the new regulation.
"The Ministry of Ecology, Spatial Planning and Urbanism is preparing a draft of the new Law on Protection from the Negative Effects of Climate Change, whose adoption is planned by the end of the current year and which will harmonize our legal framework with the requirements of EU legislation, among other things, in the part of granting emission credits and emission trading loans. After the adoption of the law, the drafting of a new regulation on activities, that is, activities that emit gases with the greenhouse effect, for which a permit for the emission of gases with the greenhouse effect is issued, will be started," the Ministry told "Vijesta".
Yesterday, however, the organization "Eko-team" announced that an urgent amendment of the regulation is necessary, because the current one still allows for abuses. Other interlocutors of the editorial office also believe that the decree had to be contested a long time ago and a new one adopted.
Multi-million dollar transaction and arrests
In December 2019, the former DPS government adopted the Law on Protection from the Negative Effects of Climate Change, and already in February 2021, the Government of Duško Marković adopted the first by-law - a regulation on activities that emit gases with the greenhouse effect. It defines that the total permitted emission of harmful gases will be reduced by 1,5 percent per year, from 3.303.542 tons of CO2 in 2021 to 2.840.155 tons in 2020. The decree also established the distribution of free emission credits until 2025, until the plant transitions to more modern technologies. With the explanation that they are doing this "in order to ensure the possible return of the level of activity of the existing plants to the level from the period 2005-2008", the Aluminum Complex (KAP) and the TE were then awarded an equal number of loans, for each 1.020.840 tons of CO2 emissions, and Željezara Toscelik for 5.800 tons.
A year after the adoption of the decree, on the eve of the change in the management of Elektroprivreda (EPCG), about 17 million euros were transferred from the treasury of that company to the account of KAP. The basis for that transaction, as the Center for Investigative Journalism of Montenegro (CIN-CG) announced at the time, was the Government's decision on the free allocation of broadcast credits. EPCG released more harmful gases than the amount of the loan, and KAP less, so KAP, with the approval of the former government, sold that "surplus" to Elektroprivreda.
The new management of EPCG then asked the Supreme Prosecutor's Office to investigate the financial operations. A few days ago, due to the suspicion that the improper allocation of emission credits to the company "Uniprom" Veselin Pejović (in 2014, took over KAP), obtained benefits of more than 20 million euros, by order of the Special Prosecutor, the former executive director of the Environmental Protection Fund (Eko fund) was arrested Jovan Martinovic and employees of Eco Fund Andrej Nedović. The Eko Fund keeps a register of emission credits and, as it says on the website, also generates income from fees for the transfer of emission credits in the amount of 0,1 percent of the minimum price of the emission credit, which is 24 euros/tCO2.
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As the CIN-CG announced in 2021, even today the interlocutors of "Vijesti" assess that the disputed transaction between EPCG and KAP was made possible precisely by the Regulation passed during the Marković Government.
We had to react earlier
Coordinator of the climate and energy program at "Eco-team", Diana Milev Čavor, said yesterday that the authorities had to react immediately after the realization of the transaction between "Uniprom" and EPCG... because, as she said, the competent ministry in that case did not form a commission for the allocation of emission credits, although the regulation provides for it. He also considers the five percent discount that "Uniprom" gave to EPCG, which lowered the price of emission credits below the prescribed minimum of 24 euros, also controversial. He also says that although the regulation provides the possibility of trading emission credits between operators, it does not define the way in which this trade should be carried out.
At the time when the regulation was passed, Milev Čavor recalled, the Energy Community and the European Commission evaluated it positively, because Montenegro was the first country in the region to define a CO2 emission collection system. Time, however, she says, has shown all the shortcomings of that regulation.
"The transposition of the EU ETS Directive was carried out partially. 2005-2008 was taken as the reference year for the allocation of free emission credits, which is the recommendation of the EU Directive on trade in emission credits. However, the Directive also stipulates that if there is a reduced capacity of plants that performed activities that emit gases with the greenhouse effect, the number of free emission units should be reduced, which did not happen in the case of 'Uniprom'. KAP is in the period 2005-2008. had production activity three times higher than at the time when the Regulation was adopted. Hence the excessive amount of free emission credits, which enabled Uniprom to earn about 15 million euros," she said.
We chose to follow the path of abuse
In 2021, Milev Čavor was elected in front of the NGO sector as one of the members of the working group for changes to the disputed regulation. At that time, the Minister of Ecology, Urbanism and Spatial Planning was Ratko Mitrović. Novaković Đurović from the department did not respond to the "News" questions about the status of the working group and what happened with the proposed regulation.
Milev Čavor said that this attempt to make changes failed "after the negative comments of the Energy Community".
"In the meantime, additional changes took place, which made the amendment of the Regulation even more necessary - Toščelik suspended, and KAP drastically reduced production. This means that the coal-fired power plant in Pljevlja is now the only major installation in the system still operating, which makes the 'trade' aspect rather irrelevant. The fact is that the 'disputed' regulation is still in force and that potential abuses can still happen," she said.
"Eko-team" said yesterday that abuses of the emissions trading system are not foreign to the EU, but also that the EU Emissions Trading Directive (EU ETS) has been amended four times and that this reform process should have taught Montenegro certain lessons. .
"On the contrary, we have chosen to follow a path that enables abuse of that system," said Milev Čavor.
Ministry: There are mechanisms, they just haven't been used
Novaković Đurović department does not deny that the current regulation has "certain shortcomings", they also say that the relevant provisions of EU Directive 2003/87 and EC Decision 2011/278 have not been consistently transferred. They add that "unfortunately, this is also the case with many other regulations" which transfer the European legal framework to the legal system of Montenegro, "most often due to lack of capacity and insufficient understanding of EU regulations".
"However, despite the above, we are of the opinion that the aforementioned Regulation contains mechanisms that would enable the fair allocation of emission credits and, above all, the protection of the public interest as the ultimate goal. The illegal allocation of emission credits for 2020 and 2021 is a consequence of the ultra vires actions of individuals and the interpretation of the Regulation in a way that favors some entities, and not the shortcomings of the Regulation itself, and in connection with the above, appropriate procedures are already being carried out before the SDT", they said. are "News" from that department.
They added that permits for the emission of greenhouse gases to operators of stationary plants in accordance with the current Law on Protection from the Negative Effects of Climate Change were only issued in 2022, "therefore, emission credits could not even be granted to them before the issuance of those permits." .
"Uniprom" submitted an application for the allocation for 2022.
Due to the fact that, as they claim, without a public call, Elektroprivreda was awarded free emission credits worth 2022 million euros for 5,5, the company "Uniprom" Nikšić filed a criminal complaint with the SDT yesterday against Prime Minister Dritan Abazović, the Minister of Ecology, Spatial of Planning and Urbanism, Executive Director of the Eco Fund Draško Boljević and President of the EPCG Board of Directors Milutin Đukanović.
"Uniprom" believes that the amount of emission credits of 222.515,53 t of CO2, which is registered in the register of the Eco Fund, is greater than that which belongs to EPCG for the year 2022.
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