EU Nations May Vote Next Month on Draft to Ban HFC-23 Offsets
2010-12-17 09:07:22.107 GMT
By Ewa Krukowska
Dec. 17 (Bloomberg) -- European Union member states may
vote next month on a regulatory proposal to prohibit imported
carbon credits linked to industrial gases in the bloc's
emissions trading system, according to a senior EU official.
The European Commission, the EU regulator, proposed Nov. 25
to restrict United Nations-sponsored offsets linked to
hydrofluorocarbon-23 and some nitrous oxide credits. The draft
needs to be approved by the EU's Climate Change Committee,
including representatives of national governments, before it
goes into effect.
The committee had a first discussion on the draft measure
on Dec. 15 and is due to hold the next meeting in January, said
Peter Zapfel, head of policy coordination in the commission's
climate department. The commission is concerned that credits
from those industrial gas projects may create "excessive"
profits and undermine the market's environmental integrity.
"A vote at the next meeting of the committee on Jan. 21 is
realistic," Zapfel said. "The modalities of the entry into
force of the ban and whether it would affect compliance with
2012 emissions was the most frequently mentioned issue during
the last meeting. It is subject to further discussions, and it's
too early to prejudge the outcome."
More than 11,000 facilities in the EU system, the world's
largest cap-and-trade program, may use UN credits as a cheaper
way to comply with their pollution quotas. The commission
proposed last month banning offsets linked to HFC-23 and nitrous
oxide from adipic acid for EU compliance as of Jan. 1, 2013.
Request to Reconsider
The current five-year phase in the EU emissions trading
system ends in 2012 and the deadline for surrendering allowances
for that year is the end of April 2013.
The International Emissions Trading Association called
earlier this week on the commission and the EU governments to
reconsider the proposal. The bloc could consider delaying the
planned ban to May 1, 2013, and provide for banking of
international credits from emission reductions achieved up to
Dec. 31, 2012, Geneva-based IETA said.
In the 2008-2012 trading period, emitters in the European
program can swap as many as 1.6 billion UN credits with EU
permits on a one-for-one basis. The EU average annual emissions
cap for that period is 2.04 billion tons of carbon dioxide,
valued at nearly 30 billion euros ($40 billion) at today's
prices. One permit represents one ton of CO2.
The proposed ban would affect credits from the UN Clean
Development Mechanism, the world's second-biggest market, and
the Joint Implementation program. The CDM-supervised credits are
awarded to investors in projects to cut greenhouse gases in
While HFC-23 projects represent less than 1 percent of all
registered CDM projects, their credits account for more than a
half of almost 479 million offsets issued so far. The 19
projects cutting the gas under the CDM program are located
mainly in China and India.
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: Mike Anderson, John Buckley.
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