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| The {{euaprov|Excess Emissions Penalty}} is made flesh in [https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32003L0087 Article 16] of the [[EU ETS Directive|EU ETS directive]].
| | {{Emissons EEP summ|euaprov}} |
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| '''Article 16: Penalties'''<br>
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| :1. Member States shall lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that such rules are implemented. The penalties provided for must be effective, proportionate and dissuasive. Member States shall notify these provisions to the Commission by 31 December 2003 at the latest, and shall notify it without delay of any subsequent amendment affecting them.
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| :2. Member States shall ensure publication of the names of operators who are in breach of requirements to surrender sufficient allowances under Article 12(3).
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| :3. Member States shall ensure that ''any operator who does not surrender sufficient allowances by 30 April of each year<ref>In ISDA Emissions Annex speak, the “{{euaprov|Reconciliation Deadline}}”.</ref> to cover its emissions during the preceding year shall be held liable for the payment of an [[Excess Emissions Penalty - Emissions Annex Provision|excess emissions penalty]]''. The [[Excess Emissions Penalty - Emissions Annex Provision|excess emissions penalty]] shall be EUR 100 for each tonne of carbon dioxide equivalent emitted by that installation for which the operator has not surrendered allowances. Payment of the [[Excess Emissions Penalty - Emissions Annex Provision|excess emissions penalty]] shall not release the operator from the obligation to surrender an amount of allowances equal to those excess emissions when surrendering allowances in relation to the following calendar year.
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| :4. During the three-year period beginning 1 January 2005, Member States shall apply a lower [[Excess Emissions Penalty - Emissions Annex Provision|excess emissions penalty]] of EUR 40 for each tonne of carbon dioxide equivalent emitted by that installation for which the operator has not surrendered allowances. Payment of the [[Excess Emissions Penalty - Emissions Annex Provision|excess emissions penalty]] shall not release the operator from the obligation to surrender an amount of allowances equal to those excess emissions when surrendering allowances in relation to the following calendar year.}}
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| Note: the [[Excess Emissions Penalty - Emissions Annex Provision|excess emissions penalty]] falls on those operators who actually emit carbon dioxide. To the extent you are a financial, and your business is in the trading, liquidity and market making of [[EUA]]s themselves, and not offsetting real-world carbon emissions they are designed to control, then {{euaprov|EEP}}s are not likely to come high up your list of priorities. That being said, there ''is'' an indirect implication for financial-only counterparties if they [[Failure to Deliver - Emissions Annex Provision|fail to deliver]] to operators in time so operators can surrender to the authorities by the {{euaprov|Reconciliation Deadline}}, since the former’s settlement failure brings a real world penalty charge on the later. Therefore you may wish to consider the otherwise rather perplexing {{euaprov|Failure to Deliver}} language in the {{euaprov|Annex}} dealing with that contingency.
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| {{M summ EUA Annex EEP Risk Period}}
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