JOHN CARLOS I

KING OF SPAIN

To all those who present, they understand and understand.

Sabed: That the General Courts have approved and I come to sanction the following law.

I

Directive 2003 /87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for the trade in greenhouse gas emission rights in the Community and amending Directive 2003 /87/EC of the European Parliament and of the Council Directive 96 /61/EC constitutes, within the European Climate Change Programme, the most relevant initiative of the European Union (EU) in order to enable the Community and its Member States to fulfil the commitment to reduce emissions of greenhouse gases. greenhouse effect, which they assumed when ratifying the Kyoto Protocol in the Framework Convention on United Nations on Climate Change, 30 May 2002.

The regime that implements the directive is inspired by one of the market instruments provided for in the Kyoto Protocol, the emissions trading, which, together with those based on investment projects in clean technology in countries Third parties (clean development and joint implementation) are the so-called flexibility mechanisms of the Kyoto Protocol.

Directive 2003 /87/EC sets out among its main objectives:

a) To help meet the obligations arising from the Convention and the Kyoto Protocol.

b) Be a complementary mechanism of the greenhouse gas emission reduction effort that must be undertaken through internal policies and measures.

c) Reducing emissions reduction costs, as trade will allow emissions in the EU to be reduced where the lower economic cost leads to such a reduction.

d) Ensure the proper functioning of the internal market in order to avoid distortions of competition which could lead to the establishment of different national regimes.

e) To gain experience in the operation of emissions trading before the year 2008 in which the international emissions trading provided for in Article 17 of the Kyoto Protocol will begin to operate.

This law aims to transpose the aforementioned directive, and it is justified in the extraordinary and urgent need to meet the following requirements:

1. First, it is necessary to comply with the timetable for implementation laid down in the directive, which requires, among other things, that all installations subject to its scope have an emission authorisation. of greenhouse gases on 1 January 2005, and that the national register of allowances is operational on 1 October 2004.

2. Second, companies need to know with sufficient time the obligations to which they will be subject and the investments needed to address them. Consequently, since the system is to be in force on 1 January 2005 and the time required for the competent authority to decide on the application for authorisation is three months, it is essential that the holder of the the facilities concerned are aware of the applicable arrangements and submit their application for authorisation and the allocation of rights by 30 September 2004 at the latest.

3. Third, the emission rights market is set up as an international market, so its implementation must be matched with that of the rest of the EU countries, in order to ensure that our agents participate in the same conditions of equality.

4. And, fourth, the immediate approval of the National Plan for the allocation of allowances is essential in order to avoid situations which may be contrary to Community law. competition, in particular, in the field of State aid and which could lead to the return by undertakings of the benefits unduly received, prior to the appropriate investigation procedures or, where appropriate, of infringement.

II

Chapter I contains the general provisions of the emissions trading scheme.

The emissions trading scheme will initially be applied to carbon dioxide emissions from installations that develop the activities listed in Annex I and exceed the capacity thresholds that are set out in Annex I. in the are set.

The activities listed in Annex I include large emission bulbs in sectors such as electricity generation, refining, production and processing of ferrous metals, cement, lime, glass, ceramics, pulp, paper and paper and cardboard. In the field of energy activities, the scope of application to installations with a rated thermal input of more than 20 MW, including cogeneration linked to any type of activity, is defined.

In accordance with Article 27 of Directive 2003 /87/EC, the fourth transitional provision provides for the possibility for operators of installations subject to the scope of this Law to apply for their exclusion, where they demonstrate compliance with all the requirements laid down by Community legislation. Temporary exclusion shall be authorised by the European Commission.

Chapter I also includes, in Article 3, the creation of the Commission for the Coordination of Climate Change Policies, an organ of coordination and collaboration between the General Administration of the State and the Autonomous Communities, key to the implementation of the provisions of the emissions trading scheme. An organ of these characteristics is essential given the technical complexity of the system of authorizations and monitoring of emissions and the need to collaborate to ensure consistency in the application throughout the territory, both in the sectors of activity included in the directive as in those sectors which are not. To this is added the necessary collaboration in relation to the set of obligations, international and community, of information on policies and measures adopted to meet the commitments in the field of climate change.

III

Chapter II regulates the regime of greenhouse gas emission authorizations.

All installations subject to the scope of this Law must have a greenhouse gas emission authorization as of 1 January 2005, the granting of which is the responsibility of the competent body. designate the autonomous community where you are located.

The authorisation shall indicate, together with the most relevant identification data, the emission monitoring methodology, the obligation to send the competent authority information verified once a year and the an obligation to deliver to the register, before 30 April of each year, a number of allowances equivalent to the verified emissions data for the previous year for cancellation.

The authorization extinction scenarios are also regulated.

IV

Chapter III contains the regime applicable to the facility pool authorizations.

Thus, installations engaged in the same activity may, subject to the authorization of the competent body, respond to the obligation to provide rights in a joint manner, provided that their holders grant sufficient power to a Single trustee and that the impact of group functioning on the internal market does not create distortions in competition.

Precisely, the safeguard of competition advises, given the particularities of the electrical sector and that a high number of facilities is concentrated in few companies, not to authorize the grouping of facilities in the sector, during the period 2005-2007. This will promote market transparency and the maintenance of effective competition, as well as contributing to the effectiveness of the incentives to the least-emitting technologies that derive from the trade in emissions rights. greenhouse.

The authorisation will be subject to the opinion of the European Commission, which has a period of three months from the time it receives the request for a decision on the matter.

The trust administrator of the facility pool shall deliver rights in number equivalent to the sum of the verified emissions of all facilities included in the pool. In the event that it is not possible to determine the amount corresponding to the sum of the emissions of all the installations, due to the lack of a verified report or discrepancies in the estimation of any installation, the said administrator does not may transmit allowances corresponding to the installation whose report has not been considered as compliant.

V

Chapter IV defines the nature and content of the National Allocation Plan, as well as its approval procedure.

The National Allocation Plan is a centerpiece in the Community system of emissions trading. It constitutes the reference framework, in force only for each of the three-and five-year periods laid down in the Directive, in which the total number of allowances to be allocated for each period, as well as the procedure applicable for the allocation. It should be based on objective and transparent criteria and also take into account the claims made through the relevant public information channels.

The number of rights assigned must be consistent with the international commitments on greenhouse gas emissions assumed by Spain, the contribution of the facilities under the scope of the implementation of this Law to total national emissions, the emission forecasts, including the technical and economic possibilities of reducing emissions in all sectors, as well as the forecasts for the opening of new installations or extension of the existing ones in the sectors covered by this Law, during the period of validity of the plan.

The plan sets out the individual allocation methodology which, in any case, should avoid the generation of unjustified differences between sectors of activity or between installations, which assume a position of advantage between sectors or between installations included in the same activity. It will also have to be consistent with the technical and economic possibilities of reducing each sector, and may take into account both production trends and the reduction measures taken before the establishment of the the market for emission allowances, in compliance with Articles 87 and 88 of the Treaty establishing the European Community.

The plan also includes a reservation for new entrants and the applicable methodology for the allocation of the rights included in that reservation.

The reservation for new entrants is made up of the set of rights that the plan initially reserves to the facilities whose entry into operation or extension is foreseen for the duration of the plan, as well as the rights previously allocated but not issued in respect of installations whose emission authorisation is extinguished by any of the causes referred to in Article 7. In the event that a remnant exists at the end of the period, it may be disposed of in accordance with the provisions of Law 33/2003 of 3 November of the Heritage of Public Administrations.

The Law also regulates the individualized allocation of allowances to be taken, at the request of the person concerned, by resolution of the Council of Ministers, on a proposal from the Ministers of Economy and Finance, Industry, Tourism and Trade and the Environment, after consulting the Committee for the Coordination of Climate Change Policies and Public Information Processing.

By way of exception, in the cases where the European Commission is most appreciated, it will be possible to assign non-communicable rights to the facility concerned, in accordance with the provisions of the provision transient sixth.

VI

Chapter V contains the regulatory regime for allowances.

The right of issue is that of a subjective right, of a transmissible nature, which gives its holder the power to issue to the atmosphere, from an installation subject to the scope of this Law, a tonne of equivalent carbon.

The right of issue is valid only for each of the periods of validity of a National Allocation Plan. They may originate in the National Allocation Plan of any Member State of the European Union or in a third country prior to recognition in an international instrument validly subscribed in accordance with the provisions of Article 25 of the Treaty. Directive 2003 /87/EC, or prior recognition of certified emission reductions or emission reduction units from the mechanisms of clean development or joint implementation, respectively.

This possibility requires compliance with applicable regulations adopted in the context of the United Nations. Thus, the second and third additional provisions take a first step in establishing the designated national authority and the procedure for the report of that authority to the projects for clean development and joint implementation, in accordance with the provisions of the Decisions 16 and 17 of the 7th Conference of the Parties to the United Nations Framework Convention on Climate Change. This is a prerequisite for Spanish companies to be able to develop projects abroad which can generate certificates that can be incorporated into the Community emissions trading scheme.

Article 21, for its part, determines who can participate in a transfer of rights, as well as the impossibility of these operations having as their object unissued rights.

VII

Chapter VI regulates the information obligations of the operator of the installation.

The operator shall be required to implement and maintain the greenhouse gas emission monitoring system in accordance with the requirements of the emission authorisation. They shall also forward to the competent regional body before 28 February a report on the greenhouse gas emissions of the preceding year, drawn up and verified in accordance with the provisions of Annexes III and IV and in the Commission Decision 2004 /156/EC of 29 January 2004 laying down guidelines for the monitoring and reporting of emissions of greenhouse gases in accordance with Directive 2003 /87/EC of the European Parliament and of the Council Tip.

The competent autonomic body must give its conformity to the verified report and, in this case, proceed to register in the corresponding table of the record the figure of verified emissions that allows to quantify the quantity of rights to be cancelled by the holder.

VIII

Chapter VII contains the regulation of the National Register of Emission Rights.

The national register of allowances is established, in accordance with the provisions of Directive 2003 /87/EC, Decision 280 /2004/EC of the European Parliament and of the Council of 11 February 2004 and the Commission Regulation on a standardised and guaranteed regime of national registries compatible with the international registration regime provided for in the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

All issuance, ownership, transfer, transfer, delivery, withdrawal and cancellation of allowances shall be entered in the register which shall consist of separate accounts from which each the person to whom the rights are issued or involved in the transfer of rights, including the General Administration of the State, in whose account the rights of issue appear in each National Plan of allocation. Likewise, limitations on the transmission of rights must be registered, in the cases provided for in this Law.

The Law also regulates the regime of issuing and transferring allowances from the State holding account to the premises holding account, both for the usual assumption of existing facilities and for those that begin to operate during the period of the plan's lifetime.

This transfer shall be made in the register and shall take place from the General Administration of the State's holding account in favour of the holder of the installation or, in the case of a group of installations, of the Fiduciary administrator. In the latter case, it shall be transferred to the account of the pool from which the administrator holds the total of the allowances for all the facilities included in the pool.

Cancellation of rights may occur at any time at the request of the holder. The holder or the trustee, in the case of authorised groupings, shall, by 30 April of each year, deliver a number of allowances equivalent to the verified emissions data entered in the register. In any event, four months after the end of the period of validity of the National Allocation Plan, the valid allowances for that period shall be automatically expired.

Finally, the relationship of the national register with the central administrator appointed by the European Commission, which provides for information to the national register of irregularities in the transmission of rights of rights, is regulated. emission to be detected, in order to cautiously suspend your registration.

IX

Chapter VIII regulates the sanctioning regime.

The Law distinguishes between very serious, serious and minor infractions, and identifies different typical behaviors related to non-compliance with the obligation to have issue authorization, the obligation to deliver emission rights in number equivalent to verified emissions and non-compliance with reporting obligations.

Among the penalties provided for is the fine per tonne of carbon dioxide emitted that has not been covered by a right of issue in the application for cancellation of the holder.

In addition, it is expressly stated that the imposition of sanctions does not exempt from the obligation to surrender rights by number equivalent to the excess that originated the sanction.

X

Finally, the final provision first incorporates the amendment of Law 16/2002 of 1 July on integrated pollution prevention and control, as required by Directive 2003 /87/EC. The purpose of this change is to eliminate the imposition of emission limits for the integrated environmental authorisation as far as CO2 emissions are concerned.

Finally, the competition titles contained in the second final provision, those provided for in Article 149.1.23. and 13. of the Spanish Constitution, together with full respect for the implementing powers that hold the Autonomous Communities in the field of environmental legislation, require a certain degree of attention for their special and complex imbrication in this norm.

First, this Law is a substantially environmental standard. Thus, both its objective-to contribute to the reduction of anthropogenic greenhouse emissions-and its origin-the commitments made under the Kyoto Protocol and the directive itself-inevitably give it this character.

Consequently, it is appropriate to invoke Article 149.1.23 of the Spanish Constitution, which reserves the State exclusive competence to issue the basic legislation on environmental protection, without prejudice to Powers of the Autonomous Communities to lay down additional protection rules.

By virtue of all of the above, the emission authorisations, the emission monitoring obligations, the reporting and the reporting obligations have been regulated as basic legislation in the field of environmental protection. the verification, safeguarding the autonomy of development standards which establish a level of higher protection and, of course, its powers of implementation or management in the field of the environment.

But, once the bases of the substantially environmental nature of these aspects have been laid, it cannot be ignored that the mechanism chosen to achieve the objective of reducing emissions, such as the creation of a new market of emission rights, has decisive consequences on economic sectors such as industrial and electric and affects the business decision making such as the investment strategy, its production levels, etc.

Consequently, in this dimension, the State competence is also at stake in order to determine the basis for the general planning of economic activity provided for in Article 149.1.13. The Court has admitted that the abovementioned competition law may cover both State rules laying down the guidelines and the overall criteria for the management of specific economic sectors, such as stock forecasts or unique measures essential to achieve the objectives proposed in the management.

In addition, Article 149.1.13, in accordance with the constitutional case-law, provides for executive actions in relation to practices or activities that may alter free competition and are of relevance to the market. supraautonomic, as is the case for the facility pool.

In this respect, the implementation of the emissions market requires, on the one hand, the establishment of the bases that govern its operation, and on the other, a series of unique implementing measures that guarantee the establishment of homogeneous for the distribution of rights throughout the national territory, so that:

(a) The number of rights allocated is consistent with the international commitments on greenhouse gas emissions assumed by Spain.

b) The emission forecasts for all sectors included and the assessment of the contribution of the installations to the total national emissions and the technical and economic possibilities of reducing emissions from the facilities in all sectors are carried out in an equitable manner.

(c) distortions of competition are avoided, as well as unjustified differences between sectors of activity and between installations.

(d) A reserve of allowances shall be established in anticipation of the opening of new installations or the extension of existing installations in any part of the Spanish territory.

Thus, by virtue of the competencies recognized by the competence of article 149.1.13. of the Constitution, the State is enabled to:

1. Set the foundations of the legal regime for emission rights and their trade.

2. º The authorization of the facility pool.

3. To develop and approve the National Plan for the allocation of emission rights as a standard through which the allocation of emission rights is carried out throughout the national territory, as well as the adoption of the methodology to proceed to its individual allocation. The plan, in addition to setting the overall emission reduction target, sets in motion for the first time the emission rights market, the essential part of which is the sharing of such rights among the operators of the facilities.

4. To process and resolve the procedures for the allocation of emission rights, an operation that cannot be dislinked from the National Plan, in so far as it is necessary to guarantee the adjustment of the overall sum of the rights assigned to each installation with the total amount of rights corresponding to the Spanish State, as well as the homogeneous application of the formula for the distribution of rights contained in the plan, by means of an identical interpretation of its variables, with independence from the territorial location of the installation.

5. º Regular and manage the national register of allowances, which is constituted as a necessary complement to the market for allowances, in so far as, as set out in the Regulation on the scheme standard and guaranteed national registers approved by the European Union, in which it must consist of three accounts which are owned by the State and all operations relating to the issue, ownership, transmission, transfer, delivery, withdrawal and cancellation of allowances. To this must be added that the netly international character of the market for emission rights requires, for the purpose of simultaneously ensuring fluidity and safety in traffic, the existence of a single register which is managed in a way centralized. In this sense, the register, in addition to being the liaison with the central authority designated by the European Commission, is called upon to be integrated into a Community network of registers, which must ensure the performance of operations in time. real with a high degree of certainty.

CHAPTER I

General provisions

Article 1. Object and scope of application.

This Law aims at the transposition of Directive 2003 /87/EC of the European Parliament and of the Council of 13 October 2003 in order to establish a regime for trade in the rights of emission of gases greenhouse, to encourage reductions in emissions of these gases in an economically efficient way.

This Law shall apply to the emissions of the gases listed in Annex I generated by the activities referred to in that Annex.

Article 2. Definitions.

For the purposes of this Law, the following definitions shall apply:

(a) Right of issue: the subjective right to issue, from an installation falling within the scope of this Act, a tonne equivalent of carbon dioxide, for a specified period.

(b) Expedition: the act by which the Registry incorporates into the account of the General Administration of the State the allowances in accordance with the provisions of the National Allocation Plan.

c) Transfer: the operation of the Register that reflects the movement of allowances between different accounts.

d) Transmission: the legal business from which a change of ownership of one or more allowances is derived.

e) Emission: the release to the atmosphere of greenhouse gases from sources located in a facility.

(f) Greenhouse gases: the gases listed in Annex II.

g) Authorisation for the emission of greenhouse gases: the authorisation required for installations carrying out activities listed in Annex I, giving rise to the emissions specified therein.

h) Pool authorization: the authorization that allows multiple installations to jointly meet the obligations of annual delivery of allowances.

i) Installation: any fixed technical unit where one or more of the activities listed in Annex I are carried out, as well as any other activities directly related to those activities that have a relationship of nature (a) technical assistance with the activities carried out in that place and may have an impact on emissions and pollution.

(j) Holder of the installation: any natural or legal person operating or controlling the installation either as an owner or under any other legal title, provided that the latter gives him sufficient powers on the technical and economic performance of the installation.

k) New entrant: any installation which carries out one or more of the activities listed in Annex I, which is granted a greenhouse gas emission authorisation as a new installation or a new installation; renewal of the authorisation due to a change in the character or operation of the facility or an extension of the facility, after notification to the European Commission of the National Allocation Plan.

l) Tonne carbon dioxide equivalent: a metric tonne of carbon dioxide (CO2) or an amount of any other greenhouse gas referred to in Annex II with a potential warming equivalent of the planet.

m) Joint Implementation Project: an investment project that meets the requirements set out in Article 6 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

n) Clean Development Project: an investment project that meets the requirements set out in Article 12 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

or) Emissions Reduction Unit: a unit issued in accordance with Article 6 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

p) Certified emission reduction: a unit issued in accordance with Article 12 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

Article 3. Commission for the coordination of climate change policies.

1. The Commission for the Coordination of Climate Change Policies is hereby established as a coordinating and collaborative body between the General Administration of the State and the Autonomous Communities for the implementation of the emissions trading scheme and the compliance with the international and Community information obligations inherent in this and, in particular, in the following areas:

a) The monitoring of climate change and adaptation to its effects.

b) The prevention and reduction of greenhouse gas emissions.

c) The promotion of carbon absorption capacity by plant formations.

d) Taking into account the criteria established by the National Climate Council, the establishment of the general lines of action of the National Authority designated by Spain and the criteria for the approval of the Mandatory reporting on voluntary participation in the Clean Development and Joint Implementation Projects of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

e) The promotion of programs and actions that encourage the reduction of emissions in sectors and activities not included in the scope of application.

2. The Commission shall be chaired by the Secretary-General for the Prevention of Pollution and Climate Change and shall have the following members:

(a) By the General Administration of the State: three vowels appointed by each of the Ministries of Economy and Finance, Industry, Tourism and Commerce and the Environment; a vowel appointed by each of the Ministries of Justice, Home Affairs, Development, Education and Science, Labour and Social Affairs, Agriculture, Fisheries and Food, Public Administrations, Health and Consumer Affairs and Housing, and a member designated by the Economic Office of the President of the Government.

b) A vowel designated by each autonomous community.

c) A vowel designated by each of the cities of Ceuta and Melilla.

d) A vocal representative of the local entities, designated by the state-wide association with the highest implementation.

3. The General Administration of the State and the Autonomous Communities shall cooperate and cooperate in the field of climate change and shall supply each other with the information it holds on methodologies applicable to the different sectors, technology and any other relevant for the purposes of the emission authorisation, the verification of the emissions, the individual allocation of allowances, or the projects for clean development and joint implementation of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

4. The Commission shall adopt its own Rules of Procedure.

CHAPTER II

Emission Authorizations

Article 4. Installations subject to emission authorisation.

1. Any installation in which one of the activities is carried out and which generates the emissions specified in Annex I shall be authorised to issue greenhouse gases issued in favour of its holder.

2. The greenhouse gas emission authorisation shall have the following content:

a) The name and address of the installation owner.

b) Identification and address of the installation.

c) A basic description of the installation activities and emissions.

(d) the emission monitoring obligations, specifying the methodology to be applied and their frequency, in accordance with Annex III to this Act and with Commission Decision 2004 /156/EC of 29 January 2004 on the establishing guidelines for the monitoring and reporting of greenhouse gas emissions in accordance with Directive 2003 /87/EC.

e) The reporting obligations, in accordance with Annex III to this Act, with Commission Decision 2004 /156/EC of 29 January 2004 laying down guidelines for monitoring and reporting emissions of greenhouse gases in accordance with Directive 2003 /87/EC and, where appropriate, with the development rules.

(f) The obligation to deliver, within four months of the end of each calendar year, allowances in quantity equivalent to the total verified emissions of the installation during the previous year.

g) Expected date of entry into operation.

3. The greenhouse gas emission authorization, if requested by the holder, may cover one or more installations, provided that they are located in the same location, have a technical relationship and have the same holder.

4. The greenhouse gas emission authorisation shall be granted provided that the competent regional authority considers it to be accredited that the holder is capable of ensuring the monitoring and reporting of the emissions in accordance with the provisions of the (d) and (e) of Article 4.2. After the three-month period has not been notified, the person concerned may understand his request for administrative silence. However, the facility may continue to operate on a provisional basis, provided that it has established an emission monitoring system in accordance with the provisions of this Law until the competent body has explicitly resolved.

The basis of the emission monitoring system and the reporting obligations in accordance with the provisions of paragraphs (d) and (e) of Article 4.2 shall be determined. Regulatory development must be compatible with Community legislation and must have the requirements of technical and economic feasibility in each sector falling within the scope of this Law.

Article 5. Request for issue authorization.

The holder of the installation shall direct the application for authorization to the competent authority designated by the Autonomous Community in whose territory the installation is located. The authorization request must contain documentation with the following information:

a) Identification and accreditation of being a holder of the facility for the purposes of this Law.

b) Identification and address of the installation.

c) Description of the installation for which authorization is requested, as well as its activities, including the technology used.

(d) the raw materials and auxiliary materials used for the production of gas emissions included in Annex I.

e) The gas emission sources listed in Annex I existing at the installation.

(f) The measures envisaged to monitor emissions, in accordance with Annex III to this Act, with Commission Decision 2004 /156/EC of 29 January 2004 laying down guidelines for the monitoring of emissions, monitoring and reporting of greenhouse gas emissions in accordance with Directive 2003 /87/EC and, where appropriate, with the development rules.

The application will be accompanied by an explanatory summary of the indications specified in the previous paragraph.

Article 6. Changes to the installation.

The operator must inform the competent body of any project of change in the character, operation or size of the installation, as well as any changes affecting the identity or the address of the owner. Where appropriate, in the light of the information submitted, the competent regional authority shall amend the greenhouse gas emission authorisation by its own initiative within the maximum period of three months.

Article 7. Extinction of the authorization.

Greenhouse gas emission authorizations will be extinguished in the assumptions of:

a) Closing the installation.

(b) Failure to operate the plant after three months from the date of the start of the activity provided for in the authorisation, unless justified by the justification declared by the competent authority to grant the authorization.

(c) In the case of a penalty, as provided for in Article 30 (a).

d) Suspension of the installation activity for longer than one year.

Article 8. Communications to the national register of allowances.

The autonomous communities shall communicate to the national register of rights of issue the resolutions of granting, modifying and extinguishing the authorizations, within 10 days of the date of the resolution.

CHAPTER III

Facilities Pool

Article 9. Facility pool requirements.

1. A facility pool may be formed for each of the periods of validity of a National Allocation Plan for installations that meet the following requirements:

(a) All installations shall carry out an activity falling within the same heading as Annex I.

b) That all facilities have a greenhouse gas emission permit, granted in accordance with Article 4.

c) To appoint a trustee, who shall have the obligations laid down in Article 13.

2. The grouping shall have an authorisation granted for that purpose in accordance with the procedure laid down in Article 12.

3. Any changes in the composition of the group or the identity or powers of the trustee shall be communicated to the competent authority to grant the authorisation.

Article 10. Content of the authorization.

The facilities pool authority will have the following minimum content:

a) Identification of the fiduciary administrator and description of the powers that have been attributed to it.

(b) Identification of the facilities included in the pool and of the greenhouse gas emission authorizations with which they are counted.

(c) Enumeration of the obligations and limitations of the trustee in relation to the delivery of allowances and market share, in accordance with the provisions of Article 13.

d) Term of validity of the authorization.

Article 11. Request for facility pool authorization.

The holders of facilities wishing to form a group must submit to the Ministry of the Environment a joint application for authorisation accompanied by the following documentation:

a) Accreditation of the identity of the facilities and their owners.

b) Period for which grouping authorization is requested.

c) Comppressed copy of the issue authorization for each installation.

(d) Public writing of the granting of power in favour of a single trustee who is credited with his ability to comply with the obligation to deliver allowances and the relationship between all the parties holders of the facilities included in the pool and the administrator.

e) Statement that the administrator is not, at the time of filing, disabled, in accordance with the provisions of the commercial law.

f) Explanatory report assessing the impact of the grouping on the internal market.

Article 12. Procedure.

1. The authorization for the grouping of facilities will be granted by the Council of Ministers on a proposal from the Ministries of the Environment, Economy and Finance, Industry, Tourism and Trade and the Commission for the Coordination of Change Policies. Climate, prior to the report of the Autonomous Communities in the territories of which the applicant facilities are located and the Ministry of Economy and Finance's Competition Defense Service. The latter report shall be without prejudice to the action taken pursuant to Law 16/1989 of 17 July of the Defence of Competition.

2. If the application meets the requirements laid down in Article 9.1 and its effects on competition, the internal market and the interests of consumers are assessed, the dossier shall be forwarded to the European Commission, which may, in a three months from the date of receipt of the request, the reasoned rejection of any application that does not comply with the requirements of Directive 2003 /87/EC.

In the event that the European Commission rejects the request, the competent body may only authorise the grouping of facilities if the latter accepts the proposed amendments.

3. The decision shall be delivered within six months of the submission of the application. After that period has not been notified, the person concerned may understand his request for administrative silence to be dismissed.

4. The resolution to be adopted shall be communicated within 10 days of its adoption to the national register of allowances and to the Autonomous Communities concerned.

Article 13. Duties of the trustee.

1. The allowances corresponding to the total allowances allocated to each of the facilities included in the pool shall be transferred from the holding account of the General Administration of the State to that of the pool.

2. The annual delivery of allowances in quantity equivalent to the sum of the verified emissions of the facilities included in the pool shall be made by the trustee.

3. The trustee shall not be able to pass on the allowances of the holder whose report has not been considered in accordance with the provisions of Article 23.

CHAPTER IV

National Allocation Plan

Article 14. Nature and content of the National Allocation Plan.

1. The National Allocation Plan, taking into account the international emission reduction obligations assumed by Spain, as well as the principle of the supplementation included in the Kyoto Protocol to the United Nations Framework Convention on Climate Change and its development regulations, must be set for each of the periods of validity:

a) the total number of allowances to be allocated,

b) the allocation procedure,

(c) the quantity of certified emission reductions and emission reduction units that are foreseeable to be used,

(d) the percentage of the allocation to each facility in which the use of this type of credit is authorised to its holder to comply with the obligation laid down in Article 4.2.f).

2. The National Allocation Plan shall be based on objective and transparent criteria, including those listed in Article 17.

It should take into account the allegations made directly or through the channels of consultation and participation in the proceedings for hearing and public information, in particular those relating to the sectors of activity included in its scope.

3. The National Plan of Allocation will be approved by the Government through royal decree, on the proposal of the Ministers of Economy and Finance, Industry, Tourism and Commerce and the Environment and previous mandatory report of the National Council of the Climate and the Commission for the coordination of climate change policies, at least 18 months before the start of the relevant period.

The National Climate Council will also participate in the monitoring of the National Allocation Plan.

4. Social dialogue tables will be set up to ensure the participation of trade union and business organisations in the preparation and monitoring of the National Allocation Plan as regards its effects on competitiveness, stability in employment and social cohesion.

These tables will be constituted within a maximum period of six months from the entry into force of this Law, and its composition and functioning will be regulated by the government prior to the report of the Coordination Commission of the Climate Change Policies.

Article 15. Validity of the National Allocation Plan.

1. The first National Allocation Plan will have a period of validity of three years from 1 January 2005.

2. The second National Allocation Plan and the successive ones will have a five-year term each.

Article 16. Method of allocation.

1. The allocation of rights for the three-year period starting on 1 January 2005 shall be free of charge, with the exception of the provisions for the reservation of new entrants to Article 18.

2. 90 percent of the rights for the five-year period starting on January 1, 2008 will be allocated free of charge, with the remaining 10 percent being allocated according to the corresponding National Plan of allocation and considering the necessary competitiveness of the Spanish industry.

Article 17. Allocation criteria.

1. The total amount of entitlements allocated by the plan shall be established in accordance with Community rules and in particular on the basis of:

(a) The international commitments on greenhouse gas emissions assumed by Spain.

(b) The contribution of the installations covered by this Law to the total national emissions.

(c) The emission forecasts, including the technical and economic potential for emission reductions in all sectors and other Community legislative and policy instruments.

d) The forecasts for the opening of new installations or the extension of existing ones in the sectors covered by this Law during the period of validity of the plan.

2. The plan shall establish the individual allocation methodology which shall in any event take into account the Community rules and in particular the following criteria:

(a) That it does not create unjustified differences between sectors of activity or between installations, in accordance with Articles 87 and 88 of the Treaty on European Community.

b) That is consistent with the technical and economic possibilities of reducing each sector.

(c) The reduction measures taken before the establishment of the emission allowance market.

d) The forecasts of production evolution.

The average emissions per product and the potential for reduction in each activity may also be taken into account.

Article 18. Reserve for new entrants.

1. The National Allocation Plan shall determine the amount of allowances reserved for new entrants, as well as the criteria governing the distribution of the rights included in that reservation, taking into account the temporary order of application, the use of energy efficient technologies. In addition, territorial cohesion criteria may be taken into account in the distribution of rights included in the reserve of new entrants.

2. In the case provided for in Article 26.4, the rights not transferred from the holding account of the General Administration of the State to that of the operator shall become part of the reservation for new entrants.

3. The rights included in the reservation of new entrants which have not been allocated before 30 June of the last year of the period corresponding to the National Plan of Allocation in force may be implemented in accordance with the provisions of Law 33/2003, 3 November, from the Heritage of Public Administrations.

Article 19. Individualized allocation of allowances.

1. The owners of the facilities shall request the Ministry of the Environment for the allocation of allowances for the duration of the National Allocation Plan.

This application shall be submitted to the autonomic authority responsible for processing the greenhouse gas emission authorization, which shall forward it, together with the documentation required in paragraph 3 of this Article, to the Ministry of the Environment within a maximum period of ten days.

2. The application shall be submitted 12 months before the start of each period of validity of each National Allocation Plan.

Facilities that have the consideration of new entrants will apply for the individualized allocation of allowances once they have greenhouse gas emission authorization.

3. The application for the allocation of rights shall be accompanied by the documentation on the record:

(a) Accreditation to be the holder of the installation and to have a greenhouse gas emission permit.

b) Installation data, referred to the three years immediately prior to the submission of the application, on:

1. Emissions of greenhouse gases included in Annex I, by combustion and by process.

2. Fuel consumption, classified according to type of fuel.

It will not be necessary to provide the verified emissions data already recorded in the National Register of Emission Rights.

c) Estimate of evolution in the production facility, fuel and raw material consumption, as well as greenhouse gas emissions, for the period covered by the National Plan of assignment.

In the case of installations with the consideration of new entrants it will indicate the likely date of operation.

4. The resolution of the allocation of allowances corresponds to the Council of Ministers, carried out the process of public information, after consultation with the Commission on the coordination of climate change policies, and on the proposal of the Ministries of Economy and Finance, Industry, Tourism and Trade and the Environment.

5. The resolution shall determine the amount of entitlements allocated to each facility during the period of validity of the National Allocation Plan and its annual distribution. After the three-month period has not been notified, the person concerned may understand his request for administrative silence to be dismissed.

6. This resolution shall be communicated, within 10 days of its adoption, to the National Register of Emission Rights and the Autonomous Communities.

7. In cases where, as a result of technological improvements not provided for in the initial allocation, a change in the characteristics of an installation which determines a change in the authorisation and a significant reduction of the emissions, the operator of the said installation shall maintain the initial allocation of allowances. By way of derogation, the Government may decide, on a reasoned basis, if the initial allocation of allowances

maintained or amended, in installations carrying out activities under heading 1.a) of Annex I.

8. Decisions on the individual allocation of allowances shall be accessible to the public, in terms and with the limitations laid down in the rules governing the right of access to information in the field of the environment.

CHAPTER V

Issue Rights

Article 20. Legal nature of the allowances.

1. The right of issue is configured as the subjective right to issue a ton of carbon dioxide equivalent from an installation within the scope of this Law.

2. The original ownership of all the allowances that appear in each National Allocation Plan, and the ownership of the allowances that are part of the reserve for new entrants, corresponds to the Administration State General, which shall assign, dispose, or cancel in accordance with the provisions of this Law.

3. The right of issue shall be valid only for the period of validity of each National Allocation Plan.

4. The right of issue shall be transmissible.

5. The issuance, ownership, transfer, transmission, delivery and cancellation of the allowances shall be the subject of registration in the national register of allowances.

6. The rights of issue may have their origin in:

a) Spain's National Allocation Plan.

b) A National Plan for the allocation of another EU Member State.

(c) A third country with a commitment to reduce or limit emissions that is part of the Kyoto Protocol to the United Nations Framework Convention on Climate Change, provided that there is prior recognition in an instrument

(d) A certified emission reduction or emission reduction unit from the clean development or joint implementation mechanisms that is issued in accordance with the provisions of the Framework Convention on The United Nations on Climate Change, the Kyoto Protocol and its development regulations and is recognised for the purpose of complying with the obligation laid down in Article 4.2.f. Recognition may take place provided that:

-have not been generated by nuclear facilities,

-have not been generated by land use activities, land use change or selviculture,

-in the case of projects for the production of hydroelectric power with a capacity exceeding 20MW, that these projects are in conformity with the relevant criteria and guidelines approved by the World Commission of Dams.

Article 21. Transmission of allowances.

1. Emission allowances may be subject to transmission:

(a) Between natural or legal persons in the European Union.

(b) Between the former and natural or legal persons in third States, prior mutual recognition of the rights of the signatory parties under international instruments.

2. The acquisition of allowances by a natural or legal person who does not have the status of an installation holder shall require the prior opening of a holding account in the national register of allowances.

3. The rights of issue may only be transmitted by the holder after they have been issued and transferred to his holding account in accordance with Article 26.

CHAPTER VI

Emissions reporting obligations

Article 22. Referral of information.

The owner of the installation must submit to the competent regional authority before 28 February the verified report on the emissions of the previous year, which shall comply with the requirements of the authorization, as provided for in the Article 4.2.e).

The report shall be verified in accordance with the provisions of Annex IV by the accredited verification bodies in accordance with the provisions of this Law, which shall be reported by the competent authority. the Climate Change Policy Coordination Commission.

Article 23. Assessment of the verified report.

1. If the competent regional authority gives its conformity to the verified report of the installation, it shall register before 31 March the data on emissions of the previous year in the table of verified emissions which are then enabled in the National registration of allowances.

2. If the competent regional authority disagrees with the verified report, it shall notify the operator of the installation of discrepancies, the proposal for a resolution of the latter in order to be able to consider the report satisfactory and, where appropriate, the estimate emissions. Examined the claims of the operator, the competent regional authority shall decide and register in the verified emissions table that is enabled for this purpose in the register the data on the emissions of the installation.

3. In cases where the holder does not refer the verified report within the time limit laid down in Article 22, the competent regional body shall carry out the emission estimate and shall register in the verified emissions table as such. effect on the record the emission data of the installation.

4. The estimation of the emission data in the assumptions of paragraphs 2 and 3 shall be carried out in accordance with the methodology required of the operator of the installation concerned.

Article 24. Suspension of the transmission of emission rights operations.

In the cases provided for in Article 23 (2) and (3), the holder may not transmit allowances until the registration of the emission data by the competent regional body is produced.

CHAPTER VII

National emission rights record

Article 25. The national register of allowances.

1. The National Register of Emission Rights is the instrument through which the permanent update of the accounting relating to allowances is ensured.

2. The register will be accessible to the public and will be attached to the Ministry of Environment.

3. The registration shall be the subject of the registration of all operations relating to the issue, ownership, transfer, transfer, delivery, withdrawal and cancellation of allowances.

You will also register the suspension of the ability to transmit allowances in the cases provided for in Articles 13.3, 24 and 28.

4. The register shall comprise at least the following accounts and tables:

(a) A holding account, a withdrawal account and a cancellation account for which the General Administration of the State shall be the holder. In the holding account, all the allowances listed in each National Allocation Plan shall be entered in accordance with the provisions of Article 20.2.

b) A holding account for each installation, in the name of its holder.

c) A holding account for each facility pool, on behalf of your fiduciary administrator.

(d) A holding account for each natural or legal person other than the former who is a party to a transmission of rights.

e) A verified emissions table.

f) A rights delivery table.

g) A table on compliance status.

5. The rules for the organisation and operation of the register shall be developed by royal decree, in accordance with the provisions of the Regulation on the standard and guaranteed regime of national registers approved by the European Commission.

Article 26. Issuance of allowances.

1. All the rights that the current National Allocation Plan provides for the allocation for the period shall be issued and entered into the holding account of the General Administration of the State before 28 February of the initial year of the period of validity of the each plan.

2. Before 28 February of each year, the register shall transfer from the General Administration of the State account to that of the holder of each installation or to that of the trustee of each grouping the rights that correspond to him the temporary distribution as set out in the resolution referred to in Article 19.5.

3. The rights assigned to new entrants and to installations whose extension or entry into operation has been provided for in the initial National Allocation Plan shall be transferred from the holding account of the General Administration of the State to the operator of the installation when the Autonomous Community communicates to the Registry that the installation has been put into operation.

4. The registration shall not transfer from the account of the General Administration of the State to that of the owner of the installation the rights assigned when the authorization of the installation has been extinguished by any of the causes foreseen in the Article 7.

Article 27. Delivery and cancellation of allowances.

1. The registration shall, at any time and at the request of its holder, proceed to the cancellation of the allowances.

2. Before 30 April of each year, the holders of the facilities or trustees shall deliver a number of allowances equivalent to the verified emissions data entered in accordance with the provisions of the Article 23.

The delivery will determine the transfer of rights to the holding account of the holder to the holding account of the General Administration of the State, and will be reflected in the rights and compliance status tables.

3. In any event, after the period of four months following the end of the period of validity of each National Plan of Allocation, the allowances valid for that period shall automatically expire and be cancelled ex officio by the record.

Article 28. Relationship of the national registry to the central administrator.

When the central administrator designated by the European Commission detects irregularities in connection with any transfer of allowances and report to the national register of allowances, this suspend the registration of the operation concerned and of any other in which the relevant allowances are involved until the detected irregularities have been resolved.

CHAPTER VIII

Sanctioning Regime

Article 29. Criminalization of violations.

1. For the purposes of this Law, and without prejudice to the provisions of the autonomous legislation, administrative offences are classified as very serious, serious and minor.

2. The following are very serious administrative violations:

a) Exercise the activity without the mandatory greenhouse gas emission authorization.

b) Failure to comply with the obligation to report on the modification of the character, operation or size of the facility, as provided for in Article 6, provided that it causes significant changes in emissions data or require changes in the methodology applicable to meet the monitoring obligations provided for in Article 4.2.d).

(c) Not to submit the verified annual report required by Article 22.

d) intentionally hide or alter the information required in Article 19.3.

e) Incompliance with the obligation to deliver rights as required by Article 27.2.

f) Prevent the verifier from accessing the sites of the facility in the cases where it is empowered by Annex IV to this Law and its implementing regulations.

g) Do not provide the necessary information for the verification procedure.

3. These are serious administrative violations:

a) Intentionally hide or alter the information required in Articles 5, 6 and 11.

(b) Incompliance with the obligation to report on the modification of the identity or address of the holder as set out in Article 6.

(c) Failure to comply with the conditions for monitoring the emissions set out in the authorisation where changes in emissions data are caused by that non-compliance.

d) Incompliance with the regulatory standards of the annual verified reports, provided that it involves altering the emissions data.

4. These are minor administrative violations:

(a) Failure to comply with the conditions for monitoring the emissions set out in the authorisation where no changes in emissions data are derived from such non-compliance.

b) Failure to comply with the regulatory standards of the annual verified reports, provided that it does not imply any alteration of the emissions data.

c) Failure to comply with any other obligations set out in this Act where such a thing has not been typified as a very serious or serious administrative infringement in the preceding paragraphs.

Article 30. Penalties.

The offences referred to in Article 29 shall give rise to the imposition of all or any of the following penalties:

a) In the case of a fatal violation:

1. Mull from 50,001 up to two million euros.

2. Temporary closure, total or partial, of the facilities for a maximum period of two years.

3. Inenablement for the exercise of fiduciary administrator functions for a period not exceeding two years.

4. Extinction of authorization or suspension of authorization for a maximum period of two years.

5. In the cases provided for in Article 29.2.e), a fine of EUR 100 for each tonne issued in excess and the publication, by means of the means which the competent authority considers appropriate, of the penalties imposed once they have acquired firmness, as well as the names, surnames or social reasons of the natural or legal persons responsible and the nature of the infringements.

The payment of the fine will not exempt the holder from delivering a quantity of allowances equivalent to that of the excess emissions, at the time of the delivery of the allowances corresponding to the calendar year following that of the commission of the infringement.

b) In the case of a severe violation:

1. Mull from 10,001 to 50,000 euros.

2. º Suspension of authorization for a maximum period of one year.

c) In case of minor infringement: fine of up to 10,000 euros.

Article 31. Responsibility of the trustee.

In the case of a facility pool, where the infringements provided for in Article 29.2.e are incurred, the trustee shall be directly responsible for the payment of the pecuniary penalty which may be imposed.

Subsidiary, the owners of the facilities will respond to the payment of the aforementioned sanction, in proportion to the emissions made by their respective facilities with respect to the total of those issued by the assembly of the for the period of validity of the National Allocation Plan.

Article 32. Graduation of sanctions.

1. The imposition of the penalties shall be due to the adequacy of the seriousness of the fact of the infringement and the sanction applied, with particular regard to the following criteria:

a) The existence of intentionality.

b) The reoffending by commission of more than one violation typified in this Law, when it has been declared by firm resolution.

c) The benefit obtained by the commission of the infringement.

d) The difference between actual and reported emissions.

2. The criteria set will be taken into account to graduate the penalty that is imposed within the interval for each type of infringement.

3. The offences referred to in Article 29.3 shall not give rise to the sanction of suspension of the authorisation provided for in Article 30.b) .2. where the infringement of the infringement has been carried out on its own initiative.

4. In any event, the temporary closure, in whole or in part, of the facilities shall be without prejudice to the payment of the salary or the compensation to the workers who come and the measures which may be provided for their security.

5. Where the amount of the fine is less than the benefit obtained by the commission of the infringement, the fine may be increased to twice that benefit.

Article 33. Sanctions concurrency.

When, for the same facts and legal bases, the infringer could be punished according to this Law and to other laws that were applicable, the possible sanctions would be imposed on him with greater gravity.

Article 34. Measures of a provisional nature.

Where a very serious or serious infringement procedure has been initiated, and if necessary to ensure the effectiveness of the resolution, the body responsible for sanctioning may agree to some or some of the The following provisional measures:

(a) Temporary, partial or total closure of installations, only in the case of procedures initiated for very serious infringements, and taking into account the provisions of Article 32.4.

b) Precinct equipment or equipment.

c) Temporary suspension of greenhouse gas emission authorization.

d) Suspension of access to the market for allowances.

Article 35. Sanctioning power.

It is for the Autonomous Communities to exercise sanctioning powers, with the exception of:

(a) The infringement provided for in Article 29.2.d).

(b) The infringement provided for in Article 29.2.e), in the groups of installations authorised under Article 12.

The sanctions for these two scenarios will be imposed by the Council of Ministers.

Additional disposition first. Incorporation of greenhouse gas emission authorization into integrated environmental authorization.

The content of the greenhouse gas emission authorization may be incorporated into the integrated environmental authorization regulated in Law 16/2002 of July 1, of integrated pollution prevention and control, in the conditions to be determined by the Autonomous Communities.

Additional provision second. National authority of the project-based mechanisms of the Kyoto Protocol.

1. A commission shall be set up to act as a designated national authority for the project-based mechanisms of the Kyoto Protocol, with the following functions:

a) Issue the mandatory reports on voluntary participation in clean development and joint implementation projects, as provided for in the current international and community regulations.

(b) Propose to the Council of Ministers the recognition of emission reduction units or certified emission reductions as valid emission allowances for the purposes of Article 20.6.d.

c) Act as a focal point for Spain in the relationship with the national authority designated by other countries for the promotion and development of clean development and joint implementation projects.

d) Elevate the Government's Delegation for Economic Affairs and the Commission on Climate Change Policy Coordination to an annual report on the actions carried out during the previous year.

2. The national authority shall promote the subscription of collaboration agreements with the Autonomous Communities in order to promote and facilitate the development of the mechanisms based on projects of the Kyoto Protocol to the Framework Convention of Nations United on Climate Change.

3. The commission shall be composed of a member of the Economic Office of the President of the Government and two vowels with the rank of deputy director-general of each of the Ministries of Foreign Affairs and Cooperation, Economy and Finance, Industry, Tourism and Trade and the Environment, designated by the owners of the respective departments and by a representative of the competent Autonomous Communities elected in the way they agree.

The chair of the commission is the Secretary-General for the Prevention of Pollution and Climate Change.

The secretariat of the commission will be entrusted to an official of the Spanish Office of Climate Change who, of not having the status of vowel, will attend the meetings with voice and without vote.

4. The commission shall meet whenever the chairman or representatives of at least two of the ministries consider it necessary, and at least twice a year.

The commission shall be governed by the provisions of Chapter II of Title II of Law 30/1992, of 26 November, of the Legal Regime of Public Administrations and of the Common Administrative Procedure.

Additional provision third. Projects for clean development and joint implementation.

1. The promoters of projects for clean development and joint implementation which, in accordance with the provisions of international and Community law, are required to have a report from the national authority designated by Spain shall submit an application together with of a copy of the project and its technical description.

2. The national authority shall analyse the project within a maximum period of two months and issue a report on the basis of the technical and environmental criteria laid down in international and Community legislation, in particular Decisions 16 and 17 /CP.7 of the Conference of the Parties to the United Nations Framework Convention on Climate Change.

3. The use of project-based mechanisms for the fulfilment of the quantified obligations assumed by Spain will give priority to projects in the field of energy efficiency and renewable energy.

4. To facilitate the development of project-based mechanisms, the Autonomous Communities will be able to set up centres to collaborate with the National Authority in the following areas:

a) Facilitate knowledge of available alternatives to different local economic actors to value costs and benefits.

b) Working with potential market participants to increase their capacity and to facilitate knowledge of the modalities of the Kyoto Protocol project-based mechanisms.

c) Edit material on project-based mechanisms and serve as a point of contact for project promoters.

d) Encourage the exchange of knowledge between different regions.

e) Meeting and implementing programmes of the European Union, the United Nations or other multilateral organisations.

f) Facilitate economic actors to define and develop innovation in methodology.

g) Facilitate and coordinate the interests of companies at different times of a project-based mechanism.

h) Foster collaboration between the public sector and the private sector in this field.

i) make a prior assessment in relation to projects submitted by companies located within the territorial scope of the Autonomous Community, and propose, where appropriate, to the National Authority for the purposes of the paragraph 1.a) of the second provision second.

Additional provision fourth.

The Government, within six months of the entry into force of this Law, will submit a report to the Congress of Deputies for discussion within the Committee on Industry, Tourism and Trade, in which the economic impact of the implementation of Directive 2003 /87/EC of 13 October, as well as of the legislation and legislation transposing the Directive in the Spanish State, for the industrial and energy sectors in Spain affected by the measures, special emphasis on the impact of these effects on their competitiveness in the internal market and on

Additional provision fifth.

The Government, within six months of the entry into force of this Law, will send to the Congress of Deputies, for discussion in the Committee on the Environment, a report on legislative and any order measures. which the Government intends to adopt in relation to the reduction of the emission of greenhouse gases in activities not covered by the scope of this Law, as well as the planned timetable for its implementation.

First transient disposition. National Mission Rights Allocation Plan 2005-2007.

The 2005-2007 National Emission Allowance Plan shall not apply to the provisions of Article 14.1 (c) and (d) or the deadline for approval provided for in Article 14.3.

Second transient disposition. Existing facilities at the entry into force of this Act.

1. The greenhouse gas emission authorisation shall be required as from 1 January 2005.

The existing facilities at the entry into force of this Law must apply for such authorization before 30 September 2004 to the body designated by the Autonomous Community in whose territory it is located or, failing that, to the in the field of environmental protection. Until the express resolution is issued, the facility may continue to operate on a provisional basis as from 1 January 2005, provided that it establishes the emission monitoring system provided for in Article 4.2.d).

2. The application for the allocation of allowances for the period 2005-2007 shall be submitted directly to the Ministry of the Environment by 30 September 2004, together with the following documentation:

a) Accreditation of having applied for the authorization of greenhouse gas emission.

b) Estimate of evolution in the production facility, fuel and raw material consumption, as well as greenhouse gas emissions, for the period covered by the National Plan of assignment.

c) Installation data, relating to the years 2000 to 2002, inclusive, about:

1. Emissions of greenhouse gases included in Annex I, by combustion and by process.

2. Fuel consumption, classified according to type of fuel.

The reliability of the data referred to in this paragraph (c) shall be accredited, alternatively, by:

i. Report of an environmental verifier accredited in accordance with the provisions of Royal Decree 85/1996 of 26 January laying down rules for the application of Council Regulation (EEC) No 1836/93 of 29 June 1996 allowing for the Companies in the industrial sector will voluntarily join a Community environmental management and audit system.

ii. Certificate of the Autonomous Community in whose territory the installation is located.

iii. Affidavit or promise of the owner of the installation.

The concealment or intentional alteration of the information contained in the affidavit or promise shall be understood to be equivalent to the infringement as defined in Article 29.2.d).

Transitional provision third. Extension or entry into operation of facilities during the period of validity of the National Allocation Plan 2005-2007.

1. The National Allocation Plan 2005-2007 may provide for the allocation of rights to facilities for which its extension or entry into operation is planned during its term of office, provided that they have, at the time of application, the authorisation for the emission of greenhouse gases, with all the administrative licences and permits required by the legislation applicable to them. For this purpose, the application for an authorisation to issue shall indicate the date of its entry into operation and be submitted by 30 September 2004.

In the case of an extension of facilities, the resolution of the allocation of allowances shall indicate the amount of rights corresponding to the extension, which shall be issued in accordance with Article 26.3

2. In the period 2005-2007, only facilities applying for the authorisation provided for in Chapter II after 30 September 2004 shall be considered as new entrants.

3. The allocation of rights to installations whose extension or entry into operation is scheduled after 1 January 2005 shall be calculated on the basis of the monthly payments remaining for the end of the period of validity of the Plan. In the event that the entry into operation is delayed by more than one month from the date envisaged, the transfer of rights to the holder's holding account shall be deducted from the proportion of the delay.

Transitional disposition fourth. Temporary exclusion.

1. Exceptionally, until 31 December 2007, the holder of an installation may request his temporary exclusion from the scope of this Law, except as provided for in paragraph 4 of this transitional provision. The application for temporary exclusion shall be submitted to the competent authority designated by the autonomous community accompanied by supporting documents certifying compliance with the following conditions:

(a) That the facility shall limit its emissions in a manner equivalent to as it would in case of not being excluded under existing national policies and measures.

b) That it will be subject to monitoring and reporting obligations on emissions equivalent to those provided for in this Act.

(c) That distortions of the internal market will not occur as a result of their exclusion.

2. The competent body, after processing public information, shall forward the complete file to the Ministry of the Environment for processing to the European Commission for the purposes of Article 27 of Directive 2003 /87/EC.

3. The excluded installations shall be subject to the regime of infringements and penalties provided for in Chapter VIII as soon as it affects compliance with the monitoring and supply obligations of the emission information.

In addition, failure to comply with the emission limitation commitment referred to in paragraph 1 (a) of this transitional provision shall be understood to be equivalent to the infringement referred to in Article 29.2.e).

4. The provisions of this transitional provision do not exempt the holders of the fulfilment of the obligations laid down in this Law until the European Commission has temporary exclusion.

In this case, the greenhouse gas emission authorization shall be deemed to be extinguished, and the provisions of Articles 18.2 and 26 shall apply in respect of the allocated allowances.

Transient disposition fifth. Plant groupings in the period 2005-2007.

1. For the duration of the first National Allocation Plan, the holders of the facilities which carry out activities listed in Annex I, except those covered under heading 1.a, may apply for authorisation to pool.

2. For the purposes of Article 11 (c), it shall be sufficient to establish that the greenhouse gas emission authorisation has been applied for before 30 September 2004.

Transitional disposition sixth. Additional rights allocation due to force majeure.

Exceptionally, when the force majeure is due to be justified, the operators may request the allocation of additional non-communicable rights until 31 December 2007. In the event that the Council of Ministers, in the light of the documentation provided, appreciates the presence of force majeure, it shall forward the application for processing to the European Commission.

Transitional disposition seventh. Amount of the fines during the period 2005-2007.

For the three-year period starting on 1 January 2005, the fine corresponding to the offence referred to in Article 29.2.e) shall be EUR 40 for each tonne issued in excess.

Final disposition first. Amendment of Law 16/2002 of 1 July on integrated pollution prevention and control.

Law 16/2002, of July 1, of integrated pollution prevention and control, is amended in the following terms:

One. A new paragraph 2 is inserted in Article 22, with the following wording:

" 2. In the case of installations subject to the Law governing the regime of trade in greenhouse gas emission allowances, the authorisation shall not include limit values for the direct emissions of such gases unless it is necessary to ensure that no significant local contamination is caused.

The provisions of the preceding paragraph shall not apply to facilities temporarily excluded from the greenhouse gas emission allowance trading scheme, in accordance with the provisions of the transitional provision. fourth of that Law. "

Two. Article 22 (2), (3), (4) and (5) shall become paragraphs 3, 4, 5 and 6 respectively.

Final disposition second. Competitive titles.

This law is dictated by the exclusive powers of the State provided for in Article 149.1.13. and 23. of the Constitution, in the field of bases and coordination of the general planning of economic and social activity. basic legislation on environmental protection, with the exception of the second additional provision, without prejudice to the implementing powers of the Autonomous Communities in the field of environmental legislation.

Final disposition third. Regulatory development.

The Government, in the field of its competences, will dictate the necessary provisions for the development of this Law.

Likewise, the government, by means of a royal decree, may modify the functions of the Commission on the coordination of climate change policies, as well as the participation of the General Administration of the State in that Commission and in the national authority designated for the project-based mechanisms of the Kyoto Protocol.

Final disposition fourth. Entry into force.

This Law shall enter into force on the day following that of its publication in the "Official Gazette of the State".

Therefore,

I command all Spaniards, individuals and authorities, to keep and keep this law.

Madrid, 9 March 2005.

JOHN CARLOS R.

The President of the Government,

JOSE LUIS RODRIGUEZ ZAPATERO

ANNEX I

Activities and gases categories included in the application scope

1. Installations or parts of installations whose main dedication is the research, development and experimentation of new products and processes are not included.

The threshold values below relate in general to production capacity or production capacity. If the same holder performs several activities of the same category on the same installation or site, the capabilities of those activities shall be added.

Other activities.

Activities	Gases
Activities.	Carbon dioxide.
Epigraphes:
1. Combustion plants with a rated thermal power exceeding 20 MW, including:
	) Public utility power production facilities.
b) Cogeneration installations that produce electrical power under ordinary or special conditions, regardless of the sector in which they service.
Hazardous or hazardous waste facilities are excluded urban waste.
2. Hydrocarbon refineries.
3. Coqueries.
Production and transformation of ferrous metals.	Carbon dioxide.
Epigraphs:
4. Installations of calcination or sintering of metal ores including sulphurated ore.
	. Facilities for the production of iron or steel (primary or secondary fusion), including the corresponding continuous casting facilities of a capacity of more than 2,5 tonnes per hour.
Epigraphs
Table_table_izq"> 6. Non-pulverised cement manufacturing facilities ("clinker") in rotary kilns with a production exceeding 500 tonnes per day, or of lime in rotary kilns with a production capacity exceeding 50 tonnes per day, or in furnaces of another type with a production capacity exceeding 50 tonnes per day day.
7. Glass manufacturing facilities including fiberglass, with a melting capacity exceeding 20 tonnes per day.
	8. Installations for the manufacture of ceramic products by baking, in particular tiles, bricks, refractory bricks, tiles, ceramic stoneware or porcelains, with a production capacity exceeding 75 tonnes per day, and a capacity
activities.	Other activities.	Other activities.	Other activities.	Other activities.	Other activities.	Other activities.
Epigraphes:
9. Industrial installations intended for the manufacture of:
	) Paper Pasta from wood or other fibrous materials.
b) Paper and cardboard with a production capacity of more than 20 tons daily.

ANNEX II

Greenhouse Gases

Carbon Dioxide (CO2).

Methane (CH4).

Nitrous Oxide (N2O).

Hydrofluorocarbons (HFCs).

Perfluorocarbons (PFC).

sulfur hexafluoride (SF6).

ANNEX III

Principles of emissions monitoring and reporting

1. Monitoring of carbon dioxide emissions. -Emissions will be followed by calculations or measurements.

2. Calculation.-Emissions calculations shall be carried out using the following formula:

Activity data × emission factor × oxidation factor

The monitoring of the activity data (fuel used, production index, etc.) will be based on the supply data or by means of measurements.

The accepted emission factors will be used. The specific emission factors for an activity shall be acceptable for all fuels. The default factors will be acceptable for all fuels, except non-commercial fuels (combustible waste such as tyres and industrial process gases). In addition, specific default factors for coal films and specific default factors for the EU or for producers in a country for natural gas will be specified. The default values of the Intergovernmental Panel on Climate Change (IPCC) will be acceptable in the case of refinery products. The emission factor for the biomass shall be zero.

If the emission factor does not take into account the fact that some of the carbon is not oxidized, then an additional oxidation factor will be used. If specific emission factors have been calculated for an activity considering oxidation, it will not be necessary to apply an oxidation factor.

The default oxidation factors defined in accordance with Directive 96 /61/EC shall be used unless the operator can demonstrate that specific factors of the activity are more accurate.

A separate calculation will be made for each activity, each installation, and each fuel.

3. Measurement. The measurement of emissions shall be made using standardised or accepted methods and shall be corroborated by a complementary calculation of emissions.

4. Monitoring of emissions of other greenhouse gases.-The use of standard or accepted methods by Commission Decision 2004 /156/EC of 29 January 2004 laying down guidelines for monitoring and monitoring of greenhouse gas emissions. notification of greenhouse gas emissions in accordance with Directive 2003 /87/EC.

5. Reporting of emissions. -All headlines will include the following information in the installation report:

A. Identifying data for the installation, in particular:

1. The name of the installation.

2. º Your address, including postal code and country.

3. Type and number of the activities in Annex I carried out at the installation.

4. Address, telephone, fax, and e-mail of a contact person.

5. The name of the owner of the installation and any parent company.

B. For each of the activities referred to in Annex I carried out at the site whose emissions are calculated:

1. Activity Data.

2. Issue Factors.

3. º oxidation factors.

4. Total Emissions.

5. Uncertainty.

C. For each of the activities referred to in Annex I carried out at the site whose emissions are measured:

1. Total Emissions.

2. Information on the reliability of measurement methods, and

3. Uncertainty.

D. For emissions from energy combustion, the report shall also include the oxidation factor, unless the oxidation in the definition of a specific emission factor of the activity has already been taken into account.

ANNEX IV

Verification Criteria

General principles

1. The emissions of each activity listed in Annex I shall be subject to verification.

2. The verification process shall include the examination of the report drawn up in accordance with Article 22 and the follow-up of the previous year. It shall examine the reliability, credit and accuracy of the monitoring systems and the reported emissions data and information, in particular:

a) The reported activity data and related measurements and calculations.

b) The choice and use of emission factors.

c) The calculations on which the determination of global emissions has been based.

d) If measurement has been used, the convenience of this option and the use of measurement methods.

3. The reported emissions shall be validated only if reliable and credible data and information are provided to enable the determination of emissions with a high degree of certainty, for which the operator shall demonstrate the following:

a) That the reported data does not present contradictions.

b) That the collection of the data has been carried out in accordance with the applicable scientific standards.

c) That the appropriate documentation for the installation is complete and consistent.

4. The verifier shall enjoy free access to all sites and all information in relation to the subject matter of the verification.

5. The verifier shall take into account whether the installation is registered in the Community Environmental Management and Audit Scheme (EMAS).

Methodology

Strategic analysis:

6. The verification shall be based on a strategic analysis of all the activities carried out at the facility, so the verifier shall have an overview of all the activities and their importance for the emissions.

Process Analysis:

7. The verification of the information submitted shall be carried out, where appropriate, at the site of the installation. The verifier shall use on-site inspections to determine the reliability of the reported data and information.

Risk Analysis:

8. The verifier shall submit all the emission sources of the installation to an assessment in relation to the reliability of the data from all sources contributing to the overall emissions of the installation.

9. On the basis of this analysis, the verifier will explicitly identify sources that present a high risk of errors and other aspects of the monitoring and reporting procedure that could contribute to errors in the determination of the global emissions, which means in particular the choice of emission factors and the calculations required to determine emissions from isolated sources. In particular, sources with a high risk of error and the above mentioned aspects of the monitoring procedure shall be addressed.

10. The verifier shall take into account any effective risk control method applied by the operator in order to minimise the degree of uncertainty.

Reporting:

11. The verifier shall draw up a report on the validation process in which the notification made in accordance with Article 22 is satisfactory. This report shall indicate all the relevant aspects of the work carried out. A statement may be made indicating that the notification made in accordance with Article 22 is satisfactory if, in the opinion of the verifier, the total emissions declaration does not make any errors.

Minimum proficiency requirements for the verifier:

12. The verifier shall be independent of the holder, carry out his activities in a professional, competent and objective manner and be aware of:

(a) The provisions of this Law, as well as, where applicable, of the relevant rules and guidelines adopted by the European Commission and the implementing rules.

b) The legal, regulatory and administrative requirements applicable to verified activities.

c) The generation of all information related to each source of the installation's emissions, in particular the generation, measurement, calculation and reporting of the data.