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Brussels, 6 August 2008

Emissions Trading: Commission to connect EU with UN carbon credit registry before December

The European Commission, Member States and the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat have successfully completed all the testing required for connecting to the UN's international carbon credit registry. The EU's Community Independent Transaction Log (CITL) and Member State registries will be connected to the UN's International Transaction Log (ITL) before December 2008 at the latest. The link will mean carbon credits issued under the Clean Development Mechanism can be transferred to the registries of EU Member States.

Environment Commissioner Stavros Dimas said: "I welcome the successful outcome of the testing phase. This now paves the way for the transfer of credits from the Clean Development Mechanism into the EU registry system. Linking up with the UN's carbon credit registry will further strengthen Europe's leading role in the global carbon market."

Two systems working together

The EU's Community Independent Transaction Log (CITL) and the UN's International Transaction Log (ITL) are electronic accounting systems which keep track of emission allowances or carbon credits of companies participating in the carbon market. The CITL, which has been operational since 2005, is the central registry for tracking ownership of allowances in the EU Emissions Trading System (EU ETS). The International Transaction Log (ITL) keeps track of various types of UN credits from countries that have signed up to the Kyoto Protocol.

The linking of the two systems will enable companies to transfer certified emission reductions (CERs) issued under the Clean Development Mechanism into their accounts in Member State registries. The Clean Development Mechanism (CDM) allows countries with an emission reduction commitment under the Kyoto Protocol to implement an emission reduction project in developing countries. These projects earn saleable certified emission reduction (CER) credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets. As CERs can be used to offset emissions under the EU ETS, the link is crucial to ensure that operators have access to an adequate supply of carbon credits.

The two systems will control and track transactions jointly. Currently, each Member State registry is connected to the CITL. After the ITL and CITL are connected, each Member State registry will be connected to the ITL only and each transaction involving an EU Member State will be passed on to the CITL for recording and additional checks.

Testing successfully completed

The European Commission, Member States and the UNFCCC Secretariat have carried out two rehearsals to test technical procedures. The first test-run, which took place from 15 to 30 May, involved five Member States. The second rehearsal, from 18 July to 4 August involved all Member States, as well as non-EU registries in Russia, Japan and New Zealand. These tests have now been successfully completed.

Next steps

The Commission is currently working with the UNFCCC Secretariat to fix the precise date for the official connection, which will be announced shortly. During the connection procedure, the Commission and Member States will suspend all registry operations for a maximum period of seven calendar days.

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