National allocation plans outline the number of CO2 emission allowances that Member States intend to allocate to energy-intensive industrial plants, so they can participate in emissions trading from January 2005. The EU emissions trading scheme will ensure that greenhouse gas emissions in the energy and industry sectors are cut at least cost to the economy and help the EU and its Member States meet their emission targets under the 1997 Kyoto Protocol.

The national allocation plans show how many CO2 emission allowances Member States plan to allocate for the 2005-2007 trading period, and how many each plant will receive. The Commission's task is to scrutinise the plans against eleven allocation criteria listed in an annex to the Emissions Trading Directive (Directive 2003/87/EG9. The most important criteria seek to ensure that the plan fits in with the country's overall strategy to reach its Kyoto target. Other criteria relate to non-discrimination issues, EU competition and state aid rules and technical aspects. The Commission may accept a plan in part or in full. If it accepts a plan unconditionally, the Member State can take a final allocation decision.