Boost for emissions trading scheme

By Nikki Tait in Brussels
Published: August 6 2008 16:29

European Union and United Nations systems for tracking the use of carbon credits will be connected before December, a move that should significantly facilitate emissions trading.
Brussels announced on Wednesday that the link-up would be in place “before December 2008 at the latest” following the successful completion of tests. The European Commission added that it was still negotiating with officials at the UN Framework Convention on Climate Change on a precise date but said this would be announced ”shortly”.

The connection will allow companies to transfer certified emission reductions (CERs) issued under the so-called Clean Development Mechanism, an UN-based Kyoto Protocol scheme, into their accounts in member state registries. These, in turn, can be used to offset emissions under the EU’s emissions trading system.
Under the EU’s ETS, heavy industry is given a fixed quota of permits to emit carbon dioxide. Companies must either keep to this limit, buy permits from others who are operating below their EU cap, or fund emission cuts in developing countries, in turn earning offsets or CERs.
Stavros Dimas, EU environment commissioner, said that he welcomed the outcome of the testing phase: “This now paves the way for the transfer of credits from the CDM in the EU registry system. Linking up with the UN’s carbon credit registry will further strengthen Europe’s leading role in the global carbon market.”
Copyright The Financial Times Limited 2008