Carbon Market Watch

For fair and effective climate protection.

EU Action on CDM (Newsletter #11)

25 Nov 2010

Alarm about the environmental integrity of industrial gas abatement projects under the CDM has reached the highest political level in Europe. In response to mounting concern about HFC-23 and N2O projects, EU Commissioner for Climate Action, Connie Hedegaard, announced in August 2010 that the European Commission would draft a proposal on quality restrictions on the use of CERs from industrial gas projects in the EU ETS and present them at the UN Climate Change Conference in Cancún in December.

EU Member State experts were expected to vote on the text at a meeting in mid-November. However, multiple delays in the internal consultation process likely linked to behind-the-scenes lobbying by industry representatives have cast doubt over the feasibility of this, raising concerns about the fate of the proposal.

The CDM Watch submission to the European Commission’s consultation on offset quality restrictions in the EU ETS calls for an outright ban on credits from HFC-23 and N2O from adipic acid production. This ban should apply to all CERs that were generated after a cut-off date that should be set no later than 1 January 2013 and should also strictly prohibit holders of HFC-23 and adipic acid CERs to bank these credits for use in Phase III of the EU ETS.

In addition to the analysis on HFC-23 projects summarized in our revision request, the Stockholm Environment Institute recently published two studies on N2O from adipic acid and N2O from nitric acid. A comprehensive overview of the problems associated with HFC-23 and adipic acid projects is provided in our Q&A on industrial gases.