Green CERS – designed to be more far-reaching, but do they really are?
Monday, 23 May 2011 13:08
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The thorough assessment of the whole situation must lead to the conclusion that the list of green CERs is actual only at the given moment in time and there are no guarantees that the list will not change in the near future depending on current political fluctuations. The CERs that are “green” now, unnecessarily must remain “green” at the beginning of the third trading period as well as in the course thereof.
What are the ‘Green CERs”? They are the credits that come from projects inscribed in the list annexed to the BlueNext spot manual and include all projects except:
a) those involving the destruction of trifluoromethane (HFC-23) and nitrous oxide (N2O) from adipic acid production and
b) those from large hydro projects i.e. hydropower generation projects with a generating capacity exceeding 20 MW.
According to the BlueNext media release from 9 May 2011 the said platform introduced a new 'Green' CER spot contract that, ‘comes in response to market demand to see the price difference of CERs surrenderable for Phase II versus those suitable for Phase III. From May 13th only HFC-23 and Nitrous Oxide Adipic acid production projects will be included in the standard CER; the new Green CER will include all other applicable projects - wind, solar, landfill gas etc - with the exception of Large Hydro projects’. The said platform also cited the words of the François-Xavier Saint-Macary, CEO of BlueNext who said, ‘This is an important and timely diversification of our CER and ERU offering. It gives the market a clearer and better defined price signal for the coming changes that Phase III brings. Of course, all of these contracts would have been through our verification process under our Safe Harbour Initiative so our members can rest assured of their integrity and value’.
Someone who wanted to find the right legislative context to the whole issue should refer to the Article 11a(9) of the Directive 2003/87/EC.
On 14 April 2011 the Council did not oppose planned restrictions on the use of international emission credits from projects involving certain industrial gases in the EU Emissions Trading System. Pursuant to the press release (provisional version) relating to 3084th Council meeting, from 1 January 2013, the use of international credits from projects involving the destruction of trifluoromethane (HFC-23) and nitrous oxide (N2O) from adipic acid production will in principle be prohibited. The Council expressed an opinion that the use of credits from such industrial gas projects was thought to stimulate the continued production and use of chlorodifluoromethane (HCFC-22) in registered plants. This could undermine the accelerated phase-out of this potent ozone-depleting and greenhouse gas substance, agreed in the framework of the Montreal Protocol.
The decision of the Council was the follow-up to the European Commission’s ‘Proposal for Regulation determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, certain restrictions applicable to the use of international credits from projects involving industrial gases’ published on 25th November 2010. The proposal for Regulation aims at banning the use of CDM international credits from projects involving the destruction of HFC-23 and N2O from adipic acid production as of January 2013. The direct legal basis for the said proposal was just Article 11a(9) of the revised Directive 2009/29/EC, which permits the introduction of use restrictions on certain project types as of January 2013, the start date of phase 3 of the EU Emissions Trading System (EU ETS). Prior to 1 January 2013, action on use restrictions for operators under the EU ETS remains the prerogative of the Member States and the Commission has no legal powers to apply use restrictions at EU level. Moreover, the Directive provides that EU level restrictions have to apply at the earliest six months from the adoption of the measures or at the latest three years from their adoption.
Article 11a(9) of the Directive 2003/87/EC
'From 1 January 2013, measures may be applied to restrict the use of specific credits from project types. Those measures shall also set the date from which the use of credits under paragraphs 1 to 4 shall be in accordance with these measures. That date shall be, at the earliest, six months from the adoption of the measures or, at the latest, three years from their adoption'.