For European companies with excess emissions
european companies will soon be able to offset their excess greenhouse gas emissions by investing in projects in developing countries as well as industrialised nations under the Clean Development Mechanism (cdm) and Joint Implementation (ji), respectively. The way was paved for the arrangement after the European Parliament's environment committee adopted a report on linking the European Emissions Trading Scheme (eets) with emission reductions achieved in cdm and ji projects. The eets, which would become operational from 2005, fixes the limits on emissions made by these companies.
While the linking with cdm projects will begin from January 1, 2005, that with ji ventures will commence from January 1, 2008. The environment panel has asked European countries to decide the limit of cdm and ji reduction credits that their companies can use towards compensating for excess emissions. Buying of emissions reductions from hydropower projects of more than 10-mega watt capacity is not allowed. Projects involving 'sinks' or the use of plants' ability to absorb carbon dioxide are also excluded. Moreover, eu countries can rely on cdm and ji projects to meet only up to 50 per cent of their respective emission reduction targets under the Kyoto Protocol.
The report says the new system would not be dependent on the Kyoto Protocol's entry into force. Doing otherwise would mean playing into the hands of Russia holding the protocol's ratification, it reasons. The eu council will now discuss the report to agree on a final text, which can be adopted by parliament in the last week of March.
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