32 150. The directive grants exemptions from the need to comply with emission limit values for plants using certain types of fuel. States may adopt stricter emission limit values and compliance deadlines than provided for in the directive. In all events, they must achieve significant emissions reductions by 1 January 2008 at the latest. Measures taken by the European Union to comply with the Kyoto Protocol 1 Joint fulfilment of commitments 151. Under the Kyoto Protocol, as signed by the European Community on 29 April 1998, the fifteen states which made up the EU before enlargement undertook to reduce their greenhouse gas emissions by 8% of 1990 levels by between 2008 and 2012. This overall objective was divided up into individual emissions reduction or limitation targets under a burden-sharing agreement (decision 2002/358/EC concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the UNFCCC and the joint fulfilment of commitments thereunder). Emissions trading2 152. Drawing on the ground-breaking mechanisms set up by the Kyoto Protocol (see § 116 above), Directive 2003/87/EC3 establishes a scheme for greenhouse gas emission allowance trading within the Community. Under the scheme, industrial firms can exchange and build up stocks of emission allowances and use them to fulfil their emissions obligations. The scheme came into force on 1 January 2005 in the 25 EU member states. 153. Although the system can cover many economic sectors and all the greenhouse gases covered by the Kyoto Protocol, its field of application during the implementation and experimentation stage (2005-2007) will be limited to major emitters in the heat and electricity generating sectors (emitting CO 2). 154. Member states must draw up national allocation plans (NAPs) in accordance with common rules set out in Directive 2003/87/EC. When drawing up these plans, states must take account of public opinion. The Commission assesses NAPs on the basis of these rules and EU rules on state aid and competition and has the power to require changes or even to reject a plan altogether. Once a plan has been approved, neither the total quantity of emission allowances nor the number of allowances per installation may be changed. 155. NAPs must include “business-as-usual” (BAU) scenarios including production forecasts and assessments of emission trends. 156. NAPs assign each installation a number of emission allowances, which entitle it to emit the corresponding quantity of CO2. Each allowance is a trading unit representing the right to emit one tonne of CO2. Companies which manage to keep their emission levels within the allowances allocated to them may sell excess amounts at market rates. Those which have difficulty in remaining within emission thresholds can opt (i) to reduce their emissions, for example by investing in more 1 europa.eu.int/eur-lex; europa.eu.int/scadplus European Commission, EU action against climate change. EU emissions trading – an open scheme promoting global innovation, 2005. 3 Official Journal , L 275, 25/10/2003 p. 0032 – 0046; deadline for transposition 31 December 2003 2