Archive pour la catégorie ‘New technologies’

The European Commission facilitates access to credit for SMEs

Mercredi 7 décembre 2011

The Commission proposes to strengthen existing aid and new uniform rules on the marketing of funds of venture capital.

The new regulation will make it easier for venture capitalists to raise funds across Europe for the benefit of start-ups. The approach is simple: once a set of requirements is met, all qualifying fund managers can raise capital under the designation “European Venture Capital Fund” across the EU. No longer will they have to meet complicated requirements which are different in every Member State. By introducing a single rulebook, venture capital funds will have the potential to attract more capital commitments and become bigger.

In addition to the measures presented last week, including €1.4 billion of new financial guarantees under the Programme for the Competitiveness of Enterprises and SMEs (COSME (2014-2020) - IP/11/1476), the European Investment Bank will keep its SME loan activity at a sustained pace, close to the 2011 level of €10 billion.

SME Action plan
Europe’s economic success depends largely on the growth of small- and medium- sized enterprises (SMEs) achieving their potential. SMEs contribute more than half of the total value added in the non-financial business economy and provided 80% of all new jobs in Europe in the past five years. The European Commission is presenting in an Action Plan the various policies that it is pursuing to make access to finance easier for Europe’s 23 million SMEs and to provide a significant contribution to growth. Proposed regulatory and other measures aim at maintaining the flow of credit to SMEs and to improving their access to capital markets, by increasing the visibility to investors of SME markets and SME shares, and by reducing the regulatory and administrative burden.

Venture capital for SMEs
Venture capital, which provides early finance to start-ups, forms an important source of long-term investment to young and innovative small- and medium-sized enterprises (SMEs). However, small fund sizes and only being able to provide low levels of capital have prevented them from playing a more important role in start-up financing. As a result, SMEs continue to depend on short-term bank loans. But in the context of the current crisis, marked by a fall in lending to the real economy, it can be very difficult for such companies to access this type of loan.

Evidence examined by the Commission shows that a company with long-term venture capital investors is more successful than a company that needs to rely on short-term finance from banks. This is commonly attributed to the rigorous screening that a venture capital fund undertakes prior to investing in a company. But the average European venture capital fund is small and far beneath the optimal size necessary for a diversified investment strategy to make a meaningful capital contribution to individual companies and thereby produce real impact. While the average venture capital fund in the European Union contains approximately €60 million, a U.S. counterpart has a fund size of €130 million on average.1 Economic studies show that venture capital funds can make a real difference for the industries they invest in once their size reaches approximately €280 million.2 Furthermore, U.S. venture capital funds invested around €4 million on average in each company; whereas European funds could only muster investment volumes of €2 million on average per company. Early-stage capital investments in the U.S. were on average €2.2 million per company while early-stage capital contributions in the EU were on average €400 000 per company. 3

Bigger venture capital funds mean more capital for individual companies and will give the funds the ability to specialise in particular sectors such as information technology, biotechnology or health care. This is turn should help SMEs have a more competitive edge in the global marketplace.

Key elements of the proposal on venture capital:
The proposal lays down a uniform “single rule book” governing the marketing of funds under the designation “European Venture Capital Funds”. A “European Venture Capital Fund” is defined by three essential requirements: 1. It invests 70% of the capital committed by its sponsors in SMEs; 2. it provides equity or quasi-equity finance to these SMEs (i.e. ‘fresh capital’); and 3. it does not use leverage (i.e. the fund does not invest more capital than that committed by investors so is not indebted). All funds that operate under this designation must abide by uniform rules and quality standards (including disclosure standards to investors and operational requirements) when they raise funds across the EU. The “single rule book” will ensure investors know exactly what they get when they invest in European Venture Capital Funds.

The proposal creates a uniform approach for the categories of investors which are eligible to commit capital to a “European Venture Capital Fund”. Eligible investors will be professional investors as defined in the 2004 Markets in Financial Instruments Directive (MiFID - see IP/04/546) and certain other traditional venture capital investors (such as high net-worth individuals or business angels). The uniform rules on venture capital investors will make sure that marketing can be tailor-made to the needs of these investor categories.

The Regulation will provide all managers of qualifying venture capital funds with a European marketing passport allowing access to eligible investors across the EU. This is a marked improvement over the existing rules in the area of asset management, in particular the 2011 Alternative Investment Fund Managers Directive (AIFMD - see MEMO/10/572) as the existing passport provided under AIFMD is only applicable to managers whose assets under management are above a threshold of €500 million. In addition, the rules of the AIFMD create a legal framework typically aimed at hedge funds and private equity firms, and are less suitable for the typical venture capital fund which would get a tailor-made regime.

Next steps:
The proposal on Venture Capital now passes to the European Parliament and the Council (Member States) for negotiation and adoption under the co-decision procedure.

The European Commission debates on the future of VAT

Mardi 6 décembre 2011

With 40 years of existence, VAT now does not seem suited to our economy based on services and technologies

On this basis, the Commission today adopted a Communication on the future of VAT. This sets out the fundamental characteristics that must underlie the new VAT regime, and priority actions needed to create a simpler, more efficient and more robust VAT system in the EU.

Three overriding objectives shape the vision for the new VAT system:

First, VAT must be made more workable for businesses. A simpler, more transparent VAT system would relieve businesses of considerable administrative burdens and encourage greater cross-border trade. This, in turn, will be good for growth. Among the measures envisaged for a more business-friendly VAT are expanding the one-stop-shop approach for cross border transactions; standardizing VAT declarations; and providing clear and easy access to the details of all national VAT regimes through a central web-portal.

Second, VAT must be made more efficient in supporting Member States’ fiscal consolidation efforts and sustainable economic growth. Broadening tax bases and limiting the use of reduced rates could generate new revenue for Member States without the need for rate increases. The standard VAT rate could even be reduced in some Member States, without any impact on revenue, if exemptions and reductions were removed. The Communication sets out the principles that should guide the review of exemptions and reduced rates. The Commission will also be analysing Member States’ use of reduced rates and exemptions when reviewing their fiscal policies in the context of the European Semester (see MEMO/11/11).

Third, the huge revenue losses that occur today due to uncollected VAT and fraud need to be stopped. It is estimated that around 12% of the total VAT which should be collected, is not (so-called VAT Gap). In 2012 the Commission will propose a quick reaction mechanism to ensure Member States can respond better to suspected fraud schemes. Furthermore, the Commission will see whether current anti-fraud mechanisms, such as Eurofisc, need to be strengthened and will explore the possibility of a cross-border audit team to facilitate multilateral controls.

Finally, the Commission has concluded that the long-standing question of changing to a VAT system based on taxation at origin is no longer relevant. Therefore, VAT will continue to be collected in the country of destination (i.e. where the customer is located), and the Commission will work on creating a modern EU VAT system based on this principle.

On 1st December 2010, the Commission adopted a Green Paper on “The future of VAT – Towards a simpler, more robust and efficient VAT system”. This Green Paper was followed by a six month public consultation in which the Commission received 1700 contributions from businesses, academics, citizens and tax authorities.

The European Parliament, the European Economic and Social Committee and the Tax Policy Group consisting of the personal representatives of the finance ministers welcomed the Green Paper and confirmed the need to reform the EU VAT system.

In parallel, the Commission carried out an economic evaluation of the VAT system.

The European Commission is helping SMEs

Lundi 5 décembre 2011

The Commission, the European Investment Bank and European Investment Fund team up to offer SMEs a guarantee instrument for bank loans

This builds on the success of the Risk-Sharing Finance Facility (RSFF), launched in 2007, that has so far helped 75 companies benefit from over €7 billion in EIB loans to projects enhancing European growth and competitiveness. The new risk-sharing instrument for SMEs will be managed by the European Investment Fund (EIF). In addition, the EIB and the European Commission are to provide extra resources for research infrastructures.

The SME risk-sharing instrument (RSI) will be managed by the EIF, the EIB Group subsidiary that specialises in providing risk finance to benefit micro, small and medium-sized enterprises across Europe via equity and loan guarantees. The EIF will offer banks a guarantee on part of their new loans and leases to innovative SMEs, allowing the banks to lend more and to do so at more attractive rates.

The amendment to the existing RSFF agreement was signed by Commissioner Máire Geoghegan-Quinn and by EIB President Philippe Maystadt at the start of the 2011 Innovation Convention in Brussels. It is expected to unlock a further €6 billion of loans until the end of 2013, including up to €1.2 billion for SMEs and up to €300 million for research infrastructures. From 2014, in conjunction with new instruments for equity finance, the Commission intends to scale up and expand the RSFF under the proposed Horizon 2020 Framework Programme for Research and Innovation.

The Risk-Sharing Finance Facility
If the EU is to reach its target of investing 3% of its GDP in research, it needs to boost private sector investment in R&D and innovation. An important pre-condition for achieving this is mobilising finance. However, financial markets and institutions are often reluctant to back research- or innovation- intensive companies or projects due to the relatively high levels of uncertainty and risk inherent in their activities. The RSFF, launched in 2007, was a direct answer to this challenge. It improves access to debt financing for promoters of research and innovation investments by sharing the underlying risks between the EU and the EIB. Together, the European Commission and the EIB are providing up to €2 billion for the period 2007-2013 (up to €1 billion each). These contributions translate into billions of additional financing available to innovative companies and the research community.

RSFF for SMEs: the Risk-Sharing Instrument (RSI)
The RSI aims to encourage banks to provide loans and leases of between €25 000 and €7.5 million to SMEs and smaller mid-sized firms undertaking research, development or innovation, with loan periods of from two to seven years, and with the risk finance covering investments in assets (tangible or intangible) and/or working capital.

The EIB will mandate the European Investment Fund (EIF) to manage the RSI. The EIF, in turn, will enter into individual guarantee agreements with banks following the submission of applications to the EIF under an open call for expressions of interest, which will be launched in early 2012. Applicant banks will be treated on a first-come, first-served basis, subject to their meeting the requirements of the EIF’s standard screening and due diligence procedures.

Under the terms of each agreement, the EIF will provide, in return for a fee, a guarantee to the bank concerned against loan defaults. For each default, the bank would receive 50% of the amount of the loan outstanding. Some 10 or so banks are likely to be involved, and the RSI plans to reach up to 500 beneficiaries with a total loan volume of up to €1.2 billion.

European Research Infrastructures
Research infrastructures play a crucial role in promoting knowledge and technology in Europe, bringing together a wide diversity of scientists and disciplines. In 2006, ESFRI published a roadmap identifying 35 priority EU-scale infrastructures required in key scientific areas. The RSFF is helping boost the emergence of these new research facilities, and the amendment will enable loans to be made not only to the infrastructures themselves but also to their suppliers and to enterprises commercialising their results and services.

The European unit Patent moves forward

Vendredi 2 décembre 2011

The European patent for improving European competitiveness was approved by the Committee on Legal Affairs and the negotiators of the Council Presidency

MEPs succeeded in adapting the proposed regime to small firms’ needs, but the deal still needs to approved by Parliament as a whole and the 25 EU Member States involved.

Parliament’s rapporteurs struck a political agreement with the Polish Presidency of the Council on the three proposals (unitary patent, language regime and unified patent court) that form the “EU patent package”. The agreement will have now to be confirmed by both the Parliament (after a vote in committee) and the Council. The regulation should enter into force in 2014.

The aim of creating an EU patent is twofold. First to reduce current patenting costs by up to 80%, so as to improve the competitive position of EU firms vis-à-vis their counterparts in the US and Japan, where patents are substantially cheaper. Second, it should help to avoid the legal confusion created when dealing with differing national patent laws.

MEPs aim to cut costs for small firms

The first piece of legislation in the package is a regulation setting up a unitary patent protection system. The agreed text largely reflects the Commission proposal, and in particular a provision allowing inventors from countries currently outside the procedure to apply for an EU patent.

Specific provisions have been introduced to ensure that small firms benefit from reduced costs and a sound system for distributing patent renewal fees. (Renewal fees account for a big share of total costs, and the economic sustainability of the system as a whole depends upon them).

What language for EU-wide patents?

The proposed regime for translating EU patents would make them available in German, English and French, although applications could be submitted in any EU language. Translation costs from a language other than the three official ones would be compensated.

Enforcing protection

An international agreement is currently being negotiated by Member States participating in the procedure to create a unified patent court so as to reduce costs and uncertainty as to the law due to differing national interpretations.

The European Commission presents its new Horizon 2020 programme

Mercredi 30 novembre 2011

The Commission today presented a financial instrument of 80 billion euros for research and innovation

Commissioner Máire Geoghegan-Quinn has announced Horizon 2020, an €80 billion1 programme for investment in research and innovation. Commissioner Androulla Vassiliou has put forward a Strategic Innovation Agenda for the European Institute of Innovation and Technology (EIT), which will receive €2.8 billion of funding under Horizon 2020. In parallel, Vice-President Antonio Tajani has announced a complementary new programme to boost competitiveness and innovation in SMEs, with an additional budget of €2.5 billion. The funding programmes run from 2014 to 2020.

For the first time, Horizon 2020 brings together all EU research and innovation funding under a single programme. It focuses more than ever on turning scientific breakthroughs into innovative products and services that provide business opportunities and change people’s lives for the better. At the same time it drastically cuts red tape, with simplification of rules and procedures to attract more top researchers and a broader range of innovative businesses.

Horizon 2020 will focus funds on three key objectives. It will support the EU’s position as a world leader in science with a dedicated budget of €24.6 billion, including an increase in funding of 77% for the very successful European Research Council (ERC). It will help secure industrial leadership in innovation with a budget of €17.9 billion. This includes a major investment of €13.7 billion in key technologies, as well as greater access to capital and support for SMEs. Finally, €31.7 billion will go towards addressing major concerns shared by all Europeans, across six key themes: Health, demographic change and well-being; Food security, sustainable agriculture, marine and maritime research and the bio-economy; Secure, clean and efficient energy; Smart, green and integrated transport; Climate action, resource efficiency and raw materials; and Inclusive, innovative and secure societies.

Horizon 2020 is a key pillar of Innovation Union, a Europe 2020 flagship initiative aimed at enhancing Europe’s global competitiveness. The European Union is a global leader in many technologies, but it faces increasing competition from traditional powers and emerging economies alike. The Commission proposal will now be discussed by the Council and the European Parliament, with a view to adoption before the end of 2013.

Funding provided by Horizon 2020 will be easier to access thanks to this simpler programme architecture, a single set of rules and less red tape. Horizon 2020 will mean: drastically simplified reimbursement by introducing a single flat rate for indirect costs and only two funding rates - for research and for close to market activities respectively; a single point of access for participants; less paperwork in preparing proposals; and no unnecessary controls and audits. One key goal is to reduce the time until funding is received following a grant application by 100 days on average, meaning projects can start more quickly.

The Commission will make major efforts to open up the programme to more participants from across Europe by exploring synergies with funds under the EU’s Cohesion policy. Horizon 2020 will identify potential centres of excellence in underperforming regions and offer them policy advice and support, while EU Structural Funds can be used to upgrade infrastructure and equipment.

€3.5 billion will be devoted to a scaled up and expanded use of financial instruments that leverage lending from private sector financial institutions. These have been shown to be extremely effective at stimulating private investment in innovation that leads directly to growth and jobs. Small and medium-sized enterprises (SMEs) will benefit from around €8.6 billion, recognising their critical role in innovation.

Horizon 2020 will invest nearly €6 billion in developing European industrial capabilities in Key Enabling Technologies (KETs). These include: Photonics and micro- and nanoelectronics, nanotechnologies, advanced materials and advanced manufacturing and processing, and biotechnology. Development of these technologies requires a multi-disciplinary, knowledge- and capital-intensive approach.

Under the Commission proposal, €5.75 billion (+21%) will be allocated to the Marie Curie Actions, which has supported the training, mobility and skills development of more than 50 000 researchers since its launch in 1996.

As an integral part of Horizon 2020, the EIT will play an important role by bringing together excellent higher education institutions, research centres and businesses to create the entrepreneurs of tomorrow and to ensure that the European ‘knowledge triangle’ is a match for the world’s best. The Commission has decided to significantly step up its support for the EIT by proposing a budget of €2.8 billion for 2014-2020 (up from €309 million since its launch in 2008). The EIT is based on a pioneering concept of cross-border public-private-partnership hubs known as Knowledge and Innovation Communities (KICs). Its three existing KICs, focused on sustainable energy (KIC InnoEnergy), climate change (Climate KIC) and information and communication society (EIT ICT Labs), will be expanded with six new ones in 2014-2020 (see IP/11/1479 and MEMO/11/851).

Funding for the European Research Council (ERC) will increase by 77% to €13.2 billion. The ERC supports the most talented and creative scientists to carry out frontier research of the highest quality in Europe, in a programme that is internationally recognised and respected.

International cooperation will also be further promoted in Horizon 2020, in order to strengthen the EU’s excellence and attractiveness in research, to tackle global challenges jointly and to support EU external policies.

The Joint Research Centre (JRC), the in-house science service of the European Commission, will continue providing scientific and technical support to EU policy making on everything from environment, agriculture and fisheries through to nanotechnology and nuclear safety.

Horizon 2020 will be complemented by further measures to complete the European Research Area, a genuine single market for knowledge, research and innovation by 2014.

The European Commission presents its new program to support SMEs

Mercredi 30 novembre 2011

With a budget of 2.5 billion euros for the period 2014-2020, the program for the competitiveness of enterprises and SMEs (COSME) will be the successor to the current program for the Competitiveness and Innovation Programme (CIP)

The new programme targets in particular: 1) entrepreneurs, in particular SMEs, which will benefit from easier access to funding for their business, 2) citizens who want to become self-employed and face difficulties in setting up or developing their own business, 3) Member States’ authorities, which will be better assisted in their efforts to elaborate and implement effective policy reform.

The Programme for the Competitiveness of Enterprises and SMEs, COSME will focus on financial instruments and support to the internationalisation of enterprises and it will be simplified – to make it easier for small businesses to benefit from it. The Programme has the following general objectives:

- Improve access to finance for SMEs in the form of equity and debt: First, an equity facility for growth-phase investment will provide SMEs with commercially-oriented reimbursable equity financing primarily in the form of venture capital through financial intermediaries. Second, a loan facility will provide SMEs with direct or other risk-sharing arrangements with financial intermediaries to cover loans.
- Improve access to markets inside the Union and globally: Growth-oriented business support services will be provided via the Enterprise Europe Network to facilitate business expansion in the Single Market. This programme will also provide SME business support outside the EU. There will also be support for international industrial cooperation, particularly to reduce differences in regulatory and business environments between the EU and its main trading partners.
- Promote entrepreneurship: activities will include developing entrepreneurial skills and attitudes, especially among new entrepreneurs, young people and women.

The Programme is expected to assist yearly 39 000 firms, helping them create or save 29 500 jobs and launch 900 new business products, services or processes, yearly. Access to credit will be easier for entrepreneurs, particularly those willing to launch cross-border activities, with an anticipated €3.5 billion in additional loans and investment for European businesses. The financial envelope for implementing the Programme shall be EUR 2.5 billion, of which EUR 1.4 billion shall be allocated to financial instruments. The remainder will be spent for financing the Enterprise Europe Network, international industry cooperation and entrepreneurship education.

The European Commission signs an international agreement to support the introduction of electric vehicles

Jeudi 17 novembre 2011

This treaty with the United States and Japan will allow a convergence of regulatory obligations in this field.

This will lead to cost savings through economies of scale for automotive manufacturers. Currently they only produce relatively small volumes of electric vehicles in different world regions. The agreement is, therefore key in the context of economic recovery and general cost-sensitiveness of the industry. Taking into account that the rules for electro-mobility technologies are currently being developed on both sides of the Atlantic and Asia, the cooperation is particularly interesting as it offers a unique opportunity to develop common approaches.

European Commission Vice President Antonio Tajani, responsible for Industry and Entrepreneurship, said that this is a crucial step towards the development and reach out of electric cars. The regulatory cooperation agreement will help to increase the market potential for this important breakthrough technology, contributing for competitiveness and a more sustainable road transport.

Under the proposed cooperating agreement 1 two informal working groups on electric vehicles will be set up under the 1998 Agreement on Global Technical Regulations. The initiative was taken by the European Commission, the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) in the United States and the Ministry of Land, Infrastructure, Transport and Tourism of Japan 2 . The working groups are indeed open to all countries that are contracting parties to the relevant UN Agreement, including India and China.

The first group will address the safety aspects of electric vehicles and their components, including the battery. It will cover the safety of occupants against electric shocks in-use, while recharging as well as after an accident. The second group will focus on environmental aspects of regulations applied to electric vehicles.

The aim of both groups is to exchange information on current and future regulatory initiatives in this field, to avoid unnecessary differences between regulatory approaches and, where possible, develop common requirements in the form of a Global Technical Regulation (GTR).

The World Forum for Harmonization of Vehicle Regulations, also known as Working Party 29 (WP.29), operates under the United Nations Economic Commission for Europe (UNECE), located in Geneva. It defines a large number of vehicle regulations, covering safety and environmental requirements for cars and other vehicles. The aim of the Forum is to promote harmonised technical requirements which reduce development costs and avoid duplication of administrative procedures for industry and therefore contribute to economic efficiency and lower costs for consumers and society.

The 1998 Agreement establishes a process through which countries from all regions of the world can jointly develop global technical regulations (“gtrs”) for vehicles and their components. It is complementary to the 1958 Agreement, with the particular aim to promote participation of various countries in the gtrs. At the present time, there are 32 Contracting Parties to the 1998 Agreement, including the EU, Japan, USA, Korea, China and India.

Objective: avoiding mistakes in spending on cohesion policy

Lundi 14 novembre 2011

DG Regio has published a working paper analyzing the errors of the cohesion policy between 2006 and 2009. It also indicated what actions can be implemented to avoid such errors.

While errors do exist, they are concentrated in a handful of programmes in a small number of Member States. The document stresses however, that ‘errors’ are not equal to ‘fraud’. The term ‘error’ is used for any non-compliance with a condition for receiving EU funds, while ‘fraud’ entails deliberate or criminal deception for the purpose of making an unjust gain. The Commission’s analysis highlights the most common examples of errors, such as contracts awarded without following the correct tender procedure; inadequate documentation to support expenditure (lack of audit trail); inaccurate calculation of overheads; application of incorrect co-financing rate; and, overestimated payment claims.
The Commission will continue its stringent audit work, along with the European Court of Auditors to further reduce the incidence of such errors. The proposed legislative package for cohesion policy form 2014-2020 will play a major part in this also through such features as the move to E-Cohesion (electronic data management) and conditions for a wider use of simplified costs.

The positive effects of the mobility of workers from Romania and Bulgaria on the European economy

Lundi 14 novembre 2011

The European Commission published a report highlighting the advantage of the mobility of workers from Romania and Bulgaria into the EU.

These workers have contributed to the skills mix as well as filling vacancies in sectors and jobs with labour shortages such as in construction and the domestic and food services sectors.

Estimates also show a positive impact of the free movement of Romanian and Bulgarian workers on the EU’s long-term GDP with an increase by about 0.3% for EU-27 (0.4% for eu-15).

Studies show too that there has been no significant impact on unemployment or wages of local workers in receiving countries: in the EU-15 studies show wages are on average only 0.28% lower they would have been without mobility of the EU-2.

The report also highlights that there is no evidence of a disproportionate use of benefits by intra-EU mobile EU citizens and that the impact of recent flows on national public finances is negligible or positive.

The Commission report will serve as the basis on which the Council will carry out a review of how the transitional arrangements on free movement of Bulgarian and Romanian workers have worked in practice.

MEPs argue for an extension of Kyoto

Mercredi 9 novembre 2011

Discover the content of the discussions this week between MEPs on the extension of the Kyoto Protocol.

MEPs said the EU must come up with a clear strategy for the UN summit on climate change in Durban at the end of the year. In a discussion 7 November.

During the debate, Environment Committee chair Jo Leinen, who also chairs the EP delegation to the UN COP 17 Summit in Durban, wondered what the EU will propose to the summit, while committee vice-chair Karl-Heinz Florenz said the EU’s past intentions were good but didn’t go far enough. He asked if the EU has a practical strategy for climate change.

The EU has to be in a position to define a clear road-map and a time line, Hedegaard said, but the EU alone doesn’t have the answer for climate change, it’s urgent to find a common ambitious global solution. “Green and growth” go together as key priorities for the Commission, she added.

Vote in EP November

In a resolution, adopted by the committee on 26 October, to be voted in plenary in November, the EP says the EU should give “public and unequivocal” support to the continuation of the Kyoto Protocol, which sets out legally binding measures to reduce greenhouse gas emissions, in order to avoid any gap after the current phase expires at the end of 2012.

It also calls on the EU to go beyond its current 20% emissions reduction target for 2020 and says new measures are needed to curb aviation and marine emissions (which are excluded from the Kyoto protocol). MEPs want aviation to be included in the EU emissions trading system from 1 January 2012.