Climate Action

Proposal to update EU ETS registry rules submitted to Climate Change Committee

Mature man sitting at desk checking bills, close-up © Digital Vision/Push

The European Commission today submitted to the Climate Change Committee its proposal to update the Regulation which governs the registry infrastructure underpinning the EU Emissions Trading System (EU ETS). This follows earlier discussions with Member States and a vote on this amendment is now scheduled for the next meeting of the Committee on 23 January.

In the EU ETS, the possibility to use international credits directly, which was open to operators in the second trading period, is replaced in the third trading period by the exchange of eligible credits for allowances. The exchange mechanism is formally put in place by the updated Regulation (articles 59 to 61 of the proposal).

As regards international credits generated by Joint Implementation projects (Emission Reduction Units – ERUs), the following provisions to implement rules set out in the ETS Directive and the Kyoto Protocol are to be established:

  • In accordance with rules on avoiding the double counting of emission reductions, the possibility to issue ERUs from projects hosted in Member States related directly or indirectly to activities in the scope of the ETS in phase 2 (2008-2012) ceases on 31 December 2012 (article 58(1) first subparagraph of the proposal).

  • ERUs for emission reductions taking place before 31 December 2012 from projects hosted in Member States related directly or indirectly to activities not in the scope of the ETS in phase 2, but included in the scope of the ETS in phase 3 (2013-2020), may be issued up to 30 April 2013 (article 58(1) second subparagraph of the proposal).

  • In application of the relevant provisions in the ETS Directive, the proposal also ensures that ERUs issued after 31 December 2012 from third countries not bound by quantified emission reduction commitments under the Kyoto Protocol's second commitment period (2013-2020) may be held in the Union registry provided it is assured they represent emission reductions taking place before 31 December 2012. This assurance can be given in two possible ways: either they are issued in accordance with the Joint Implementation track 2 procedure; or if this proves not possible, they may be held if they are certified as corresponding to emission reductions before 31 December 2012 by an independent entity accredited by the Joint Implementation Supervisory Committee (article 58(2) of the proposal).

These provisions related to ERUs concern units issued as first Kyoto commitment period ERUs. Following the relevant Joint Implementation decisions taken at the Doha climate conference last month, second commitment period ERUs may not be issued before 2016.

The amendment also aims to clarify the banking rules related to aviation allowances, such that 2012 aviation allowances are carried over to phase 3 without any change in their designation as aviation allowances (article 116 of the proposal).

Beyond the ETS, the amendment implements the accounting of transactions under the Effort Sharing Decision in the Union registry (articles 74 to 90 of the proposal).

A small number of other improvements are envisaged in addition to the changes outlined above.