| Introduction: CDM/JI Linking Directive
The EU adopted a Directive in 2003 to establish an emission trading system (ETS) with the aim of reducing CO2 emissions from large industrial emitters in the EU. The Parliament played an important role in reinforcing the environmental effectiveness of that Directive, and NGOs have cautiously welcomed it. As soon as a compromise on th ETS directive was found, the Commission proposed an amending Directive, which will allow operators in the ETS to use credits from the Kyoto Protocol project mechanisms - Joint Implementation (JI) and the Clean Development Mechanism (CDM) to meet their targets in place of emission cuts within the EU. CAN-Europe demanded that, if such a link would at all be made, then only credits from sustainably sound projects should be allowed to enter the EU's domestic system (see position papers and letters under "NGO views" below).
To the disappointment of environmental groups, the text of the linking directive finally adopted does not contain significant environemnatal and additionality checks.
Qualitative limitation: Credits from forestry (sinks) project are excluded for the period 2005-7 and their subsequent introduction will be determined by a Commission review. Hydroelectricity projects are allowed, with vague language asking MS to take into account international criteria such as those elaborated by the WOrld Commission on DAMs, especially for projects with a generation capacity of over 20 MW. Credits from nuclear power projects are excluded, but this only reiterates the language under the Kyoto Protocol, which does not allow such harmful projects to be counted as generating emission reduction credits.
Quantitative limitation: Member States will have to specify a limit up to which individual installations will be able to use external credits to comply with the ETS, expressed in x% of initially allocated allowances for that installation.
The full final text of the Linking directive is available here.
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