Sceptre International Group News | Denmark, UK want expansion of industrial gas offset ban

The Sceptre International Group Limited blog reports on the latest industry news.  For more information, visit Sceptre Group’s website at www.sceptreinternational.com.

An industrial gas offset ban should be expanded to non-ETS sectors, Denmark and the UK say.

EU officials on 21 January agreed to ban most industrial gas offsets used in the bloc’s emissions trading scheme (ETS) from 1 May 2013.

However, Denmark and the UK reckon the ban should be consistent with all member states’ emissions targets for sectors outside of the ETS, particularly since the restrictions are applicable only to cap-and-trade operators.

“The decision taken by member states on the 21 January only applies to the emissions trading scheme. However, we recognise the need to be consistent across the board,” a spokesperson with the UK’s Department of Energy and Climate Change told Point Carbon News in an emailed statement.

The ban, which still needs approval by the EU parliament, blocks the use of carbon credits generated from HFC 23 and adipic acid N2O projects.

These credits, which are generated from projects mostly located in China, India and South Korea, account for nearly 70 per cent of all certified emission reductions (CERs) issued by the UNFCCC to date.

Last month, however, Denmark’s minister for climate change and energy Lykke Friis said the government would not use the credits from emission reductions generated after 2012 for compliance in the non-ETS sector.

Furthermore, the Scandinavian nation plans to scrap post-2012 CERs generated from HFC 23 projects in the government’s portfolio.

“To my knowledge, Denmark is so far one of the few countries that have taken this decision and we encourage other EU member states to follow suit,” the minister said in a statement.

EU law obliges the bloc to cut its greenhouse gas emissions 20 per cent below 1990 levels by 2020, and certain UN-backed emission offsets can be used to reach that goal.

This means companies covered by the emissions trading scheme must collectively cut emissions 21 per cent below 2005 levels in 2020, while non-ETS sectors must deliver a 10-per cent cut.

Under an effort-sharing decision governing emissions from non-ETS sectors, each member state has agreed to a binding national emissions limitation target for 2020 which reflects its relative wealth.

In 2008, the non-ETS emissions from Germany, France, UK, Italy and Spain alone totalled 1.81 billion tonnes of carbon dioxide equivalent, or 61 per cent of all emissions from 30 nations taking part in the EU cap-and-trade scheme, according to data from the European Environment Agency.

A spokeswoman from France’s environment ministry said: “We are aware of Denmark’s position. However, France has not made any official statement on this yet.”

Officials from Germany, Italy and Spain had not responded to questions or were not immediately available for comment.
“It would be somewhat paradoxical if member states, that decided to exclude these credits from the EU ETS based on environmental integrity, should find the same credits good enough to use for compliance against national targets,” said Stig Schjoelset, a senior policy analyst at Thomson Reuters Point Carbon.

However, he pointed out that the emissions offset eligibility criteria apply only to the EU ETS in strictly legal terms.

www.pointcarbon.com

Sceptre International Group Limited is a specialist investment firm focused in low carbon financial investments such as sustainable biofuel plantations, agricultural farmland and green technologies.  For more information on Biofuel Investments, please visit Sceptre Group’s website at www.sceptreinternational.com.

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