More than 30 companies along with 85 other participants from the Netherlands and Belgium took part on February 6 and 7 in the first electronic simulation of a new rate based emissions trading programme for NOx reductions. The Netherlands Ministry of Housing and the Environment (VROM) with the Automated Credit Exchange developed and conducted the simulation exercise, which took place in Maastricht, allowing participants to experience how a proposed Netherlands rate-based emissions trading programme functions, and how it could assist them to reduce NOx emissions cost effectively. The programme is designed to use market forces to rapidly achieve NOx reductions, and structured to accommodate economic growth, an approach not common in Europe.
Rather than the “cap and trade” approach, which gives existing participants a guaranteed emissions level but restricts growth and entry by new companies, this rate-based structure establishes a steadily tightening performance standard rate (PSR) of emissions per unit of electricity. It then uses a market based adjustment mechanism to take into account fluctuations in energy use. Organisations that perform better than the standard would have credits to trade.
