“Neither a borrower nor a lender be, For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry.” Polonius, Hamlet Act 1, scene 3, 75–77 This is about borrowing EUAs from a later phase for use in an earlier phase. Specifically: I will receive Phase III allowances in February 2013. Can I surrender these in April 2013 against 2012 emissions? Paragraph 1 of Article 13 states:
“Allowances issued from 1 January 2013 onwards shall be valid for emissions during periods of eight years beginning on 1 January 2013.”This paragraph sets the period of validity of Phase III allowances (the ones issued from 1st January 2013). That period only includes emissions happening on or after 1st January 2013; thus it excludes emissions from earlier periods. So, you cannot use Phase III allowances for complying with Phase II obligations. However, clearly you can use any Phase III allowances for complying with obligations of any year within Phase III. That same paragraph 1 says that Phase III allowances are valid for compliance against emissions happening throughout the eight year period of 1st January 2013 to 31st December 2020. Footnote on grammar The phrase “periods of eight years beginning on 1 January 2013” is not totally clear. I think it means “the period of eight years beginning on 1 January 2013.” Footnote: Shakespeare on borrowing Shakespeare was spot on: “Borrowing dulls the edge of husbandry.” He meant that it makes you less good at managing your finances – which we know to be true. The European Commission must have had this in mind when they decided that you couldn’t borrow from Phase III for complying with Phase II obligations. Bravo!