Offsetting in the EU

The EU Emissions Trading Scheme (EU-ETS) is a cap-and-trade system which came into force in 2005. The EU-ETS is the largest mandatory cap-and-trade scheme to date and includes 30 European countries. Up to 50% of the EU-wide reductions over the period 2008-2020 can be achieved by buying CDM and Joint Implementation (JI) offsets. This means about 1.6 billion credits from the CDM and JI can be used in the EU-ETS over the period 2008-2020. The EU-ETS is the largest offset buyer to date.

The EU-ETS does not allow the use of CDM credits from forestry projects and has additional requirements for large hydro projects over 20MW (learn more). Credits from HFC-23 and adipic acid projects have been banned from 2013 onwards (learn more). Also, CDM projects that have not been registered by the end of 2012 need to be located in a Least Developed Country (LDC) in order to be eligible to sell their credits in the EU-ETS.

Offsets can also be used by EU countries to meet their emissions reduction obligations for sectors not covered by the EU-ETS (e.g. agriculture and transportation). For these sectors, 60% of the targets can be achieved using international offsets. Some EU Member States have agreed to apply the same quality restrictions for offsets as are mandated under the EU-ETS but others have not.

Carbon Market Watch advocates for strict quality restriction in both the EU-ETS and for the non-traded sectors.

For more information, see the section on policy events including presentations and documents presented to EU policy makers in the European Parliament.

 

Facebook
Twitter
LinkedIn

Related posts

State aid to industry: Lifeline or gravy train?

The debate on EU industrial subsidies in the face of the US Inflation Reduction Act and against the backdrop of the Emissions Trading System (EU ETS) and Carbon Border Adjustment Mechanism (CBAM) deals raises some uncomfortable questions.

Join our mailing list

Stay in touch and receive our monthly newsletter, campaign updates, event invites and more.