26 Nov 2010 10:11:03
EU to ban certain emissions trading credits
Certain types of emissions credits are to be banned under new proposals from the European Union (EU).
From January 1st 2013, trifluoromethane (HFC-23) and nitrous oxide (N2O) credits from industrial gas projects will be ineligible for use by those participating in the EU emissions trading scheme.
The EU has previously taken steps to ban credits from nuclear facilities and from Land Use, Land-Use Change and Forestry activities.
Among the key reasons for the ban was the belief that "crediting the abatement of HFC-23 can create a perverse incentive to produce more HCFC-22", of which it is a by-product. HCFC-22 is an ozone depleting gas.
The EU also believes that issuing credits for HFC-23 undermines efforts to phase out HCFC-22 under the Montreal Protocol, adding that there is also currently a poor geographical distribution of such industrial gas projects.
According to the EU, "the acceptance of credits from industrial gas projects has been controversial for some time" and has the potential to "create huge financial rewards for project developers".
Earlier this year, the Clean Development Mechanism announced that it was to carry out a review of the standards in place for projects using HFC-23 to offset their emissions, believing it to be sufficient to prevent abuse of the system.