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22nd Feb 2020

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Brussels proposes ban on certain emission credits

  • Cancun, Mexico: the emission credits ban is aimed at helping UN climate talks (Photo: Mike McHolm)

The European Commission has put forward a proposal to ban the use of certain off-setting credits under the bloc's emissions trading system (ETS).

News that firms in developing countries including China and India were netting large windfall profits by intentionally augmenting their production of hydrofluorocarbon (HFC-23) and nitrous oxide (N2O) gases caused a stir over the summer, prompting the commission's move on Thursday (25 November).

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Under the UN's clean development mechanism, the firms were able to amass valuable credits though the subsequent destruction of the potent greenhouse gases, a bi-product of industrial processes linked to refrigeration.

European firms are estimated to have paid roughly €1.5 billion for the controversial credits between 2008 and 2009 to off-set their own emissions, but the process will be banned from 1 January 2013 if experts from EU member states support the commission proposal.

"Some industrial gas credits have given rise to concerns about the environmental integrity of these credits and the carbon market at large," EU climate commissioner Connie Hedegaard said in a statement.

"In particular, the lucrative nature of HFC-23 projects appears to discourage countries hosting these projects from supporting cheaper and more direct action to cut these emissions," continued the Danish commissioner.

Environmental NGOs welcomed the news as an important step.

"Today's proposal on restrictions … is a milestone in terms of removing fake carbon credits from the system," said Eva Filzmoser, programme director at CDM Watch.

The move comes as international delegations prepare to descend on the Mexican beach town of Cancun.

MEPs on Thursday adopted a resolution outlining their list of demands for the UN climate talks where commission officials hope to bank a number of limited agreements ahead of a more all-encompassing deal in South Africa next year.

The narrowly adopted resolution called on EU member states to achieve a 30 percent drop in CO2 emissions (on 1990 levels) over the next decade, rather than the current 20 percent cut being offered.

The chairman of parliament's environment committee, Socialist MEP Jo Leinen said: "deadlock in climate change negotiations would be unacceptable in Cancun."

"The EU needs to push for concrete results and play its own part by stepping up its CO2 emissions reduction target from 20 percent to 30 percent," he added, also calling on the bloc to deliver on fast-start funding promises to gain the trust of developing countries.

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