Clean Development Mechanism: Questions and Answers concerning further quality restrictions on the use of credits from industrial gas projects in the post-2012 EU ETS
Brussels, 25 August 2010
What is the timeframe for the proposal?
An impact assessment is currently being carried out by the Commission services with a view to a proposal being prepared for the Climate Change Committee before Cancún. It is important to note that adoption of any restriction will be subject to three months scrutiny by the European Parliament in accordance with the regulatory procedure identified in the Directive.
What about Stakeholder Feedback?
Stakeholder consultation is an important part of the preparation and adoption of any measure.
Since the entry into force of the Climate and Energy Package, many stakeholders have communicated their views to the Commission. Further views expressed while the proposal is being prepared will also be taken into account as Member States will, no doubt, consider views when discussing the draft measure in the Climate Change Committee later this year.
What types of credits are being considered for the proposal?
All types of industrial gas projects are being considered in the impact assessment currently being prepared by the Commission. The measure would apply to international credits generated by the project based mechanisms of the Kyoto Protocol.
What kind of restriction will apply?
The impact assessment being prepared by the Commission will consider different types of restrictions including full use restrictions, such as those currently applied in the EU ETS to projects at nuclear facilities and projects from LULUCF activities, and use restrictions based on a multiplier approach.
When will the restrictions apply?
Some have been asking for restrictions not to apply to credits issued by the Executive Board prior to the adoption of the measure, calling this "retroactive". To be clear, the EU ETS Directive (2009/29/EC) allows for measures to be applied "to restrict the use" in the EU ETS of credits from certain project types. The issuance of units is managed by the CDM Executive Board.
The EU ETS already applies full use restrictions to projects from nuclear facilities and to projects from LULUCF activities. Under the EU ETS, Member States have always been free to apply such use restrictions on a unilateral basis. The application of article 11a(9) in the Directive simply harmonises this approach.
In accordance with the Directive, use restrictions can apply from 1 January 2013. The Directive foresees a notice period of 6 months to 3 years for the application of the restriction from the time the restrictions are formally adopted in order to allow sufficient time for credit owners.