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EU Won't Apply 'Retroactivity' When Restricting Carbon Offsets
2010-10-13 13:28:30.275 GMT
By Ewa Krukowska
Oct. 13 (Bloomberg) -- The European Union's planned
proposal to impose extra quality restrictions on the use of
United Nations emissions offsets linked to hydrofluorocarbons
after 2012 won't be retroactive, a senior EU official said.
The European Commission, the EU regulatory arm, is
considering limits on the UN's carbon credits from projects that
cut the industrial gas HFC-23 amid allegations of misuse. UN
offsets, or Certified Emission Reductions, are awarded on
projects that lower emissions in developing nations and can now
be swapped one-for-one with permits in the EU's cap-and-trade
program, the world's largest.
"We're not going to apply retroactivity," Jos Delbeke,
director general for climate at commission, said in an interview
in Brussels today without elaborating. "We'll come out with a
proposal very soon, according to the timetable Commissioner
Hedegaard announced."
EU Climate Commissioner Connie Hedegaard said last month
that she asked her staff to draft a proposal by early November
on the use of offset credits for compliance in the EU carbon
market.
The commission said earlier this year that it is concerned
that credits related to HFC-23 and nitrous oxide may be
generating "windfall" profits for some developers. Any
commission proposal to impose limits on offsets would require
member states' approval to become binding.
The earliest date that any kind of quality requirements for
credits generated under the UN Clean Development Mechanism could
be implemented would be Jan. 1, 2013, according to the
commission. Whether that will impact projects that have already
been registered will be open to the debate, it said in August.
Second Phase
The second phase of the ETS ends in 2012 and the third runs
for the eight years through 2020.
UN Certified Emission Reductions for December 2012 rose
almost 10 percent over the past two months. The European
Federation of Energy Traders said last month that the "complete
regulatory uncertainty" over the use of offsets in the EU is
unsustainable.
Regulators of the CDM are also ramping up scrutiny after
allegations that some developers are seeking excessive credits
related to HFC-23, an industrial gas whose warming potential is
11,700 times more powerful than carbon dioxide. They are
assessing whether the methodology for awarding those offsets
should be changed.
Fossil Fuels
The EU's emissions trading system, or ETS, covers more than
12,000 facilities that produce energy or goods ranging from
paper to cement. Emitters including E.ON AG, Germany's biggest
utility, and Royal Dutch Shell Plc, Europe's largest oil
company, need an allowance for each ton of carbon dioxide they
let off when burning fossil fuels. Those producing more than
their allowance must buy more; those that emit less can sell
their surplus.
In addition to its plans to restrict the use of HFC-23
credits for compliance in the bloc's cap-and-trade program, the
EU is also calling for international action to phase out the
productions of hydrofluorocarbons under the ozone-protection
Montreal Protocol.
For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
--Editors: Jones Hayden, Mike Anderson
To contact the reporter on this story:
Ewa Krukowska in Brussels at +32-2-237-4331 or
ekrukowska@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
