Kyoto CP1 CO2 Offsets Cancelled Next Week

UN offsets from the first compliance period of the Kyoto protocol will be cancelled next week unless they are moved into national registry accounts.

Certified emissions reductions (CER) and emissions reduction units (ERU) from the 2008-12 first compliance period (CP1) of the Kyoto protocol will be cancelled on 18 November, at the end of the treaty’s first accounting period.

Some EU member states have opted to allow the offsets to be carried over to CP2, in 2012-20, although only 2.5pc of CERs can be carried over in this way, meaning there are caps at member state level.

“Most companies — excluding new installations — have existing national accounts suitable for holding Kyoto units,” broker Redshaw Advisors said.

Most remaining first compliance period CERs were swapped for EU allowances before the March deadline, with 256mn offsets submitted in the 2014 compliance cycle.

This figure is expected to be much lower in the 2015 compliance cycle because second compliance period offsets can be submitted for exchange at any point during CP3, in 2013-20, as long as the total cap on exchanges is not reached. Analyst Energy Aspects expects the figure to be around 40m in 2015.

There are around 180mn offsets left for exchange in phase three of the EU emissions trading scheme.”

Source: Argus Media