Vote to ban Russian carbon emission reduction units from EU ETS set for 23 January
Correction: In the ICIS story headlined "Vote to ban Russian carbon emission reduction units from EU ETS set for 23 January" dated 11 January 2013, please read in the new fourth and fifth paragraphs. A corrected story follows.
The EU's Climate Change Committee is set to vote on 23 January on the European Commission's proposal to restrict rules regarding the use of emission reduction units (ERUs) in Phase III (2013-2020) of the EU Emissions Trading System (EU ETS).
At the end of 2012, market participants had hoped to have more clarity over the use of ERUs before the start of Phase III, but the Commission only submitted its formal proposal to the committee on Thursday following discussions with member states even though the main proposed changes had been revealed earlier (see EDCM 13 December 2012).
The ERU benchmark contract has been under pressure over 2012, shedding 92% of its value, ICIS data show (see EDCM 28 December 2012).
Russian ERUs ban
The Commission proposed banning ERUs issued by countries that do not have legally binding emissions targets for the period 2013-2020. "ERUs issued by third countries which do not have legally binding quantified emission targets from 2013 to 2020 or that have not deposited an instrument of ratification relating to such an amendment to the Kyoto Protocol, should only be held in the Union Registry if they have been certified to relate to emission reductions verified as having taken place before 2013," the draft amendment said.
The Commission added that this assurance can be given in two possible ways: either these ERUs are issued in accordance with the Joint Implementation (JI) track-2 procedure; or they are certified as corresponding to emission reductions before 31 December 2012 by an independent entity, accredited by the Joint Implementation Supervisory Committee.
ERUs from Russia will be affected. Russia was the second-biggest issuer of ERUs (207m) in the 2008-2012 period, after Ukraine (233m), according to data from the UN Framework Convention on Climate Change, which oversees the JI mechanism. SM
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