Chemical Guide

Carbon credits gained by destroying controversial HFC-23 and nitrous oxide industrial gases will be banned from Europe’s emissions trading scheme (ETS) after a vote by EU member-state representatives.

Environmental campaigners hailed the move as a “milestone” in upholding the ETS’s integrity. The ban will come into effect in April 2013.

Connie Hedegaard, the EU’s climate action commissioner, said that the industrial pollutants offered questionable value for money, geographical distribution and environmental benefit.

“Continuing to use them is also not in the EU’s interest as doing so could discourage host countries from supporting cheaper and more direct action to cut these emissions,” she said.

“Our aim is not to reduce the number of credits available but to ensure the international carbon market is based on a better quality and distribution of credits.”

In the year 2008-9, 84% of EU ETS carbon credits were used to finance projects in India and China that destroyed the pollutants, according to the environmental think tank Sandbag.

But critics say that this represented a scam which encouraged more production of the gases, simply so that they could be cheaply destroyed.

Because of the ETS, the gases became more profitable than the refrigerants and coatings they were originally used to build. HFC-23 producers received windfall profits as a result.

Natasha Hurley of environmental campaign group CDM Watch welcomed the European Commission’s decision but said it was “unfortunate” that the date for the ban had been pushed back to 30 April, from the proposed 1 January start date.

“It’s unfortunate that member states were not entirely immune to pressure from a small group of investors who lobbied hard to extract as many concessions as possible throughout this process,” Hurley said.

The ban’s delay would allow an additional 52 million credits – worth some €676 million – to potentially be traded, she added.

Source: Euractiv.com