The decision by EU Member States to endorse a European Commission proposal to ban offsets from HFC-23 and N2O from adipic acid (N2O AA) abatement projects from entering the EU Emissions Trading System (EU ETS) as of 30th April 2013 was a great step forward in ensuring the environmental integrity of the EU emissions trading system (ETS). Nevertheless, questions still remain surrounding the effects of this ban. One such question relates to the continual use of industrial gas offsets by Member States under the [Effort Sharing Decision (ESD)]( “”).
While we welcome harmonized action to defend the environmental integrity of the EU ETS, it’s important to note that the ban does not cover EU Member States’ national targets in the non-traded sectors. This is significant given that under the Effort Sharing Decision (ESD), up to 2/3 of the total emissions reductions required (in the non traded sector) of EU Member States from 2013-2020 can come from offsets.
During the recent European Council Environment Ministers meeting, [Denmark]( “”) informed the Council that it does not intend to use international offsets from projects originating from banned industrial gas projects for national compliance under the effort sharing decision for the period 2013-2020. Furthermore Denmark has invited other Member States to join a [draft declaration]( “”) which would voluntarily commit them to applying the restrictions that apply to the EU ETS and thus create continuity between the traded and non traded sectors.
Sandbag strongly supports Denmark’s decision not to use industrial gas offsets to meets it effort sharing targets and applauds its leadership on this issue. While there is talk of other Member States, such as Austria, Estonia, Germany, Greece and the [UK]( “”), joining this declaration the positions of the member states is not clear. In a move to get clarity on this issue [CDM Watch]( “”), [EIA]( “”) and Sandbag have sent [open letters]( “Open_letter_on_use_of_banned_offsets_by_EU_Member_States”) to Europe’s Environment Ministers regarding their use of banned offsets.
We look forward to them clarifying if they intend to ban HFC-23 and N2O (AA) offsets for use in the effort sharing sectors, and if so when this ban will come into effect.