Carbon credits issued under the current phase of the EU emissions trading scheme (ETS) will come to life this morning when the UKs national allowance registry goes back online.
The registry acts like an online banking system, providing accounts that can be used to hold, transfer and cancel the carbon allowances issued under the EU ETS and the emissions reduction units established by the Kyoto protocol.
Under the national allocation plan published by the government in the Spring, companies that come under the emissions scheme received an allotment of credits for the second phase, which runs from January 2008 to the end of 2012.
The amount of CO2 produced is strictly capped, and any business outstripping their credit allowance is required to buy more credits.
In the first phase of the scheme all permits were issued for free by national governments. But under phase two a portion will be auctioned, as the start of establishing a market price for carbon. In the UK, phase two of the EU ETS lays out a total of 1.2 billion credits, of which some 7 per cent, or 84 million, will be auctioned over the five year period. In a world first, the first 4 million will go under the hammer on 19 November.
The permits to be put up for public sale constitute 30 per cent of the allowances set aside for energy companies, forcing the latter either to pay more for their allocations or to curb the amount of carbon they produce.
The newly-opened national registry is now linked to the UNs certified emissions reductions (CER) database and the EU system, enabling companies to log and trade all permits from a single, interlinked account. Individuals with no compliance obligations may also set up an account in order to buy, sell and trade the certificates.
Last week, the aviation sector reacted with anger when the European Council of Justice and Home Affairs rubber-stamped plans to include airlines in the remit of the next phase of the EU ETS. The International Air Transport Association (Iata) accused Brussels of
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