Feb. 26 (Bloomberg) -- The European Union’s regulatory arm plans to provide guidelines on its treatment of imported carbon credits following a rule change in the bloc’s emissions trading system, according to a statement published today.
The European Commission advice covers the certification requirement for some United Nations carbon offsets, which are reductions that compensate for emissions made elsewhere, it said today on its website. The guidance will be made public before the changes to the bloc’s emissions registry come into force, according to the statement.
The guidance affects UN Emission Reduction Units, or ERUs, which are created by projects that cut greenhouse-gas discharges in developed nations and countries in transition to a market economy including Russia and Ukraine. The EU’s cap-and-trade system, the world’s biggest, allows the use of some UN offsets as a cheaper way to comply with carbon-emission limits.
More than 660 million ERUs have been issued since the climate-protection Kyoto Protocol became legally binding in 2005, according to UN data. Under the revised EU registry rules, the bloc’s carbon market will be closed from this year to international offsets made as of 2013 by nations without new climate goals.
ERUs issued from this year for emission cuts made before the end of 2012 can be held and used in the EU’s market as long as they were generated under the so-called Track Two of the UN Joint Implementation program, according to the new registry rules approved by EU governments last month. Track Two involves independent verification of emission reductions and approval by the JI Supervisory Committee.
ERUs representing emission cuts made from 2008 to 2012 and issued after last year under a procedure overseen by governments, known as Track One, will be allowed only if they are certified by one of the independent entities accredited to UN authorities.
“It is envisaged that project participants will switch tracks where possible,” the commission said today. “Although this will not always be possible for all units issued in respect of a Joint Implementation project, a project participant may at any time apply to switch tracks. The cases in which issuance under track 2 is not possible are expected to be quite limited.”
Following a vote by representatives of national governments last month, the revised EU registry regulation needs to undergo a three-month scrutiny period by member states and the European Parliament before it enters into force.
--Editors: Andrew Reierson, Rob Verdonck