EU to Connect with U.N. Carbon Credit Registry
August 6, 2008 // Published as a news service by IHS
The European Commission (EC) announced that the European Union (EU) and the United Nations Framework Convention on Climate Change (UNFCCC) secretariat successfully completed all the testing required for connecting to the U.N. international carbon credit registry.
The EU's Community Independent Transaction Log (CITL) and member state registries will be connected to the U.N. International Transaction Log (ITL) before December 2008.
The CITL and the ITL are electronic accounting systems that keep track of emission allowances or carbon credits of companies participating in the carbon market:
- The CITL, which has been operational since 2005, is the central registry for tracking ownership of allowances in the EU's Emissions Trading Scheme (ETS).
- The ITL keeps track of various types of U.N. credits from countries that have signed up to the Kyoto Protocol.
The linking of the two systems will enable companies to transfer certified emission reduction (CER) credits issued under the Clean Development Mechanism (CDM) of the Kyoto Protocol into their accounts in member state registries.
The CDM allows countries with an emission reduction commitment under the Kyoto Protocol to implement an emission reduction project in developing countries. These projects earn saleable CER credits, each equivalent to one ton of CO2, which can be counted towards meeting Kyoto targets.
As CER credits can be used to offset CO2 emissions under the EU ETS, the link is crucial to ensure that operators have access to an adequate supply of carbon credits.
The two systems will control and track transactions jointly. Currently, each member state registry is connected to the CITL. After the ITL and CITL are connected, each member state registry will be connected to the ITL only, and each transaction involving an EU member state will be passed on to the CITL for recording and additional checks.
The EC, EU member states and UNFCCC secretariat have carried out two rehearsals to test technical procedures. The first test run, which took place from May 15 to 30, involved five member states. The second rehearsal, from July 18 to Aug. 4, involved all member states, as well as non-EU registries in Russia, Japan and New Zealand. These tests have now been successfully completed.
Stavros Dimas, EC's environment commissioner welcomed the successful outcome of the testing phase, saying "This now paves the way for the transfer of credits from the Clean Development Mechanism into the EU registry system. Linking up with the U.N.'s carbon credit registry will further strengthen Europe's leading role in the global carbon market."
The EC is currently working with the UNFCCC secretariat to fix the precise date for the official connection, which will be announced shortly. During the connection procedure, the EC and member states will suspend all registry operations for a maximum period of seven calendar days.
For more information, see the EC's web site on the Emissions Trading Scheme and the EC's web page on the Community Independent Transaction Log.
Source: European Commission.