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Use of CERs and ERUs in the third EU ETS trading period

February 2013 - Which certificates may be generated by climate change mitigation projects after the Doha conference? Which states can they be traded between, and when and how may they be used in the third trading period of the EU Emissions Trading Scheme?

by Konrad Raeschke-Kessler of the German Emissions Trading Authority (DEHSt)

In Doha it was agreed that the CDM would be continued without a break, and a procedure would be developed to accelerate the issuance of ERUs under JI. Rules on the use of CERs and ERUs in the EU Emissions Trading Scheme (EU ETS) promise to be complex in the future:

Project-generated emissions certificates will be exchanged for (aviation) emissions allowances by means of an online process at the request of installation and aviation operators. The Registry Regulation was amended accordingly on 23 January. Within the EU, a process is still needed, however, which allows all operators to exhaust a specific minimum amount of certificates. Once implemented, approximately 1.6 billion certificates will be eligible for use in the EU ETS during the period 2008 to 2020; this means around 450 million certificates for existing installations in Germany.

Restrictions apply for certain CERs and ERUs

  • Certificates for reductions up to 2012 can in principle be used until 31 March 2015
  • Certificates from industrial gas projects (HFC 23 and adipic acid) can only be used until 30 April 2013
  • Certificates for reductions as of 2013 and which were generated by CDM and JI projects registered in or before 2012, and CERs from CDM projects conducted in LDCs from 2013 onwards, may be used until 31 December 2020
  • For JI projects conducted within the EU up to the end of 2012 and causing direct or indirect reductions in the emissions from installations covered by the ETS (double counting), ERUs and CERs must be issued by 31 December 2012. This also applies for CDM projects in Malta and Cyprus, both of which belong to the Annex I countries as of 2013
  • ERUs from installations that come under the emissions trading scheme from 2013 must be issued by 30 April 2013
  • ERUs from JI projects in third countries with no Kyoto Protocol target which were issued after 1 January 2013 may only be used in the EU ETS if validated by the JI Supervisory Committee or, if that is not possible, if the accredited JI auditor has verified that the associated reductions occurred by the end of 2012.