Climate Action

Commission submits proposal for international credit entitlements for 2013 to 2020

Hands typing on laptop computer, close-up © Medioimages/Photodisc

The European Commission has prepared a draft regulation on international credit entitlements and today submitted it to the Climate Change Committee for consideration at its June meeting. The draft regulation specifies the maximum limits up to which operators under the EU emissions trading system (EU ETS) may use eligible credits from the Kyoto Protocol’s project based mechanisms (i.e. Clean Development Mechanism and Joint Implementation) for compliance with emission limits from 2013 to 2020. During phase 2 (2008-2012) operators have already used over one billion international credits. Use of these credits is one means to increase the cost-effectiveness of achieving Europe's 2020 reduction goals.

Under the proposed rules, EU ETS participants operating stationary installations will be entitled to use international credits during the 2008-2020 period up to the higher of two limits:

  • Either the amount of international credit entitlements specified in the National Allocation Plans for the 2008-2012 period (phase 2);
  • or up to 11% of the free allocation of EU allowances granted to them in that period.

Other entitlements would apply to operators of stationary installations who were new entrants after 2008 and to operators of stationary installations in new sectors included in the scope of the EU ETS after 2012. As they did not receive such free allocations or entitlements for international credit use in phase II, they will be able to use international credits up to a maximum of 4.5% of their verified emissions during the 2013-2020 period. The proposed Regulation also sets out special provisions for operators of stationary installations that have experienced significant capacity extension. Finally, aircraft operators are entitled to use international credits up to a maximum of 1.5% of their verified emissions during the period 2013-2020.

Subject to a positive opinion by the Climate Change Committee,  and after a three months scrutiny by the European Parliament and Council, the regulation will enter into force. The proposal provides that Member States would then have one month to calculate and notify to the European Commission the international credit entitlement for each of their operators in accordance with the limits set in the Regulation.