November 25, 2010
This story about EU plans to limit CO2 offsets was published by EurActiv on 25th November 2010.
As the UN climate summit in Cancún draws nearer, the EU is preparing a proposal to rein in the use of international carbon credits under its cap-and-trade system.
The European Commission is putting the finishing touches to a proposal to restrict the use of offset credits from industrial gas projects in the EU’s emissions trading scheme (EU ETS) after 2012.
It had originally planned to get the text ready in time for the Cancún climate conference, which starts on Monday, but it said yesterday (24 November) that this could now be done during the two-week conference.
“I can’t say whether it will be in the next few days or next week,” a Commission spokesperson told EurActiv. But she added that the proposal is on the final straight and will be sent to EU member states as soon as it is finalised.
Under the EU ETS, companies can meet some of their CO2 reduction obligations by financing cheaper CO2-cutting projects in developing countries. Those projects generate credits under the UN’s Clean Development Mechanism (CDM) that companies can use to meet their targets under the EU’s trading scheme.
A large proportion of those projects have involved the destruction of HFC-23, a potent greenhouse gas that is a by-product of manufacturing refrigerant gas HCFC-22e.
However, these projects have recently been subject to review at the UN board responsible for CDM after NGOs provided evidence that the atmospheric concentration of HFC-23 has actually increased due to the mechanism. They claim this is the result of companies milking the system for more credits.
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