EU Proposes Lowest Allowed Limit for CERs usage in Phase 3, more bad news for Indian compliance carbon marketRead Now
The European Commission has prepared a draft regulation on international credit entitlements and submitted it to the Climate Change Committee for consideration at its June meeting. CER spot prices are currently trading at 0.37 Euro/t.
The draft regulation specifies the maximum limits up to which operators under the EU emissions trading system (EU ETS) may use eligible credits from the Kyoto Protocol’s project based mechanisms (i.e. Clean Development Mechanism and Joint Implementation) for compliance with emission limits from 2013 to 2020. During phase 2 (2008-2012) operators have already used over one billion international credits. Use of these credits is one means to increase the cost-effectiveness of achieving Europe's 2020 reduction goals.
Under the proposed rules, EU ETS participants operating stationary installations will be entitled to use international credits during the 2008-2020 period up to the higher of two limits:
The proposed Regulation also sets out special provisions for operators of stationary installations that have experienced significant capacity extension. Finally, aircraft operators are entitled to use international credits up to a maximum of 1.5% of their verified emissions during the period 2013-2020.
Subject to a positive opinion by the Climate Change Committee, and after a three months scrutiny by the European Parliament and Council, the regulation will enter into force. The proposal provides that Member States would then have one month to calculate and notify to the European Commission the international credit entitlement for each of their operators in accordance with the limits set in the Regulation.
Each operator of a stationary installation which received a free allocation or an entitlement to use international credits in the period from 2008 to 2012 shall be entitled to use international credits during the period 2008 to 2020 up to the amount allowed to it from the period 2008 to 2012, or to an amount corresponding to a maximum of 11% of its allocation during the period from 2008 to 2012, whichever is the higher.