London, 10 July (Argus) — EU member state officials in the climate change committee today approved a European Commission draft regulation limiting the number of international credits that installations can use in complying with the EU emissions trading scheme (ETS).
The regulation aims to limit international credit use to the lowest level allowed by the EU ETS directive. The directive specifies that installations and aircraft operators in participating countries are allowed to submit a certain number of offset credits generated under UN Kyoto protocol projects in place of EU ETS allowances.
Under the approved rules, 2008-20 usage entitlements for stationary installations would be limited to either the amount of international credit entitlements specified in national allocation plans for phase 2 (2008-12), or up to 11pc of free allocation of EU allowances granted to them in phase 2 — whichever limit is higher. EU countries submitted national allocation plans before the beginning of phase 2, detailing the total quantity of allowances they each intended to issue during that phase and how they planned to distribute them.
Operators of stationary installations that did not receive a free allocation or an entitlement to use international credits in phase 2 would be entitled to use international credits during 2008-20 up to a maximum of 4.5pc of their verified emissions during the third phase (2013-20). Aircraft operators would be entitled to use international credits up to a maximum of 1.5pc of their verified emissions during 2013-20.
The proposed regulation would also establish special provisions for stationary installations that have experienced “significant capacity extension” since previous phases or that are carrying out activities newly included in the EU ETS in phase 3. Aircraft operators are entitled to use international credits up to a maximum of 1.5pc of their verified emissions in phase 3.
Operators used over 1bn international credits during phase 2.
The regulation must now go through a three-month scrutiny in the European Parliament and EU Council before the commission adopts and publishes it and it can enter into force. EU member states will then have one month to inform the commission of the international credit entitlement for each of tis operators in accordance with the limits set in the regulation.
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