2006/780/EC: Commission Decision of 13 November 2006 on avoiding double counting of greenhouse gas emission reductions under the Community emissions trading scheme for project activities under the Kyoto Protocol pursuant to Directive 2003/87/EC of the European Parliament and of the Council (notified under document number C(2006) 5362)   (Text with EEA relevance)
Date: 2006-11-13
Institutions: European Commission
Subjects: EU Member State, EU environmental policy, exchange of information, greenhouse gas, pollution control measures, reduction of gas emissions, tradeable emission permit

L 316/12

EN

Official Journal of the European Union

16.11.2006

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 13 November 2006

on avoiding double counting of greenhouse gas emission reductions under the Community
emissions trading scheme for project activities under the Kyoto Protocol pursuant to Directive
2003/87/EC of the European Parliament and of the Council

(notified under document number C(2006) 5362)

(Text with EEA relevance)

(2006/780/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(2)

Having regard to the Treaty
Community,

establishing the European

Having regard to Directive 2003/87/EC of
the European
Parliament and of the Council of 13 October 2003 establishing
a scheme for greenhouse gas emission allowance trading within
the Community and amending Council Directive 96/61/EC (1),
and in particular Article 11b(7) thereof,

Whereas:

(1)

trading

In order to ensure the environmental
integrity of the
scheme, Directive
emissions
Community
2003/87/EC requires the Member States to ensure that
when hosting project activities as established under the
flexible mechanisms of the Kyoto Protocol to the United
Nations Framework Convention on Climate Change
(ERUs) or
(UNFCCC), no emission reduction units
certified emission reductions
issued for
(CERs) are
reductions or limitations of greenhouse gas emissions
that
take place in installations that participate in the
Community emissions trading scheme, as this would
result in a double counting of emission reductions or
limitations.

(1) OJ L 275, 25.10.2003, p. 32. Directive as amended by Directive

2004/101/EC (OJ L 338, 13.11.2004, p. 18).

(3)

(4)

Such reductions or limitations could in particular occur
if: a project activity for fuel switching occurs in an instal-
lation falling under the Community emissions trading
if a project activity in the municipal heat
scheme,
in a lower production in
generation sector
another
the Community emissions
trading scheme; or, if a project activity for a wind- or
feeds electricity into the electricity
hydropower plant
electricity
thereby
grid,
generation.

installation under

fuel-based

replacing

results

fossil

Recognising that Member States might have committed
themselves before the adoption of Article 11b(2) of
Directive 2003/87/EC to issuing ERUs or CERs that
result in double counting, Article 11b(3) and (4) allow
ERUs and CERs to be issued until 31 December 2012,
the project
even if
the
activities
emissions
the
Community emissions trading scheme, provided that an
equal number of allowances is cancelled.

the reductions or
indirectly or directly reduce or

limit
under

limitations of

installations

that

fall

of

Article 11b(3) and (4) of Directive 2003/87/EC diffe-
rentiates between instances where it
is possible to
determine the extent of reductions or limitations in
each installation under
emissions
trading scheme that is affected by the project activity
(direct reductions or limitations) and instances where
the extent of reductions or limitations can only be
determined for a group of installations under the scope
of the Community emissions trading scheme (indirect
reductions or limitations).

the Community

16.11.2006

EN

Official Journal of the European Union

L 316/13

(5)

(6)

(7)

(8)

(9)

For direct reductions or limitations, the operator of the
installation where the reduction or limitation occurs is
responsible for
the cancellation of allowances corre-
sponding to the quantity of ERUs and CERs issued for
such reductions or limitations For indirect reductions or
limitations, the national authorities are responsible for
cancelling these allowances in the national registry of
the Member State that issues the ERUs and CERs.

in

an

under

falling

The most appropriate way to account for reductions or
limitations
the
installation
Community emissions trading scheme that result from
a particular project activity is to calculate the share of
such reductions or limitations within the total planned
emission reductions or limitations of this project activity,
as established by its approved baseline. If, in the case of
indirect
the quantity of
reductions or
limitations,
installations falling under the
reductions in individual
Community emissions trading scheme cannot be iden-
tified exactly, the quantity of reductions or limitations
within the total reductions or limitations of the project
activity that would cause double counting should be
estimated.

trading scheme

requires
The Community emissions
Member States to notify to the Commission the total
quantity of allowances intended to be allocated for the
2008-2012 period in their national allocation plans 18
months in advance of the start of the period. The precise
amount of emission reductions or limitations generated
by a particular project activity is, however, established
annually after these have taken place.

anticipated

A set-aside should be established in the national allo-
cation plan for
the period 2008 to 2012 of each
Member State hosting activities under the project-based
mechanisms of the Kyoto Protocol which could cause
listing each approved project activity
double-counting,
and
of
or
reductions
its
emissions that take place in installations that participate
in the Community emissions trading scheme and for
which ERUs or CERs should be issued by the Member
State (‘trading sector project-reductions’). In addition, the
set-aside table should contain all explanatory information
needed to establish the extent of ‘trading sector project-
reductions’ anticipated for each project activity being
hosted by the Member State.

limitations

(10)

(11)

needed to establish the extent of ‘trading sector project-
reductions’ anticipated for planned project activities to be
hosted by the Member State.

‘trading sector project-
ERUs or CERs that represent
reductions’ may be issued up until 31 December 2012.
Each
the
should
such
Commission.

issuance

notified

be

to

In their national allocation plans, Member States hosting,
or intending to host, activities under the project-based
mechanisms of the Kyoto Protocol which could cause
double-counting should indicate the projected emissions
for
scope of Directive
2003/87/EC both with and without the effects of the
anticipated trading sector project-reductions.

falling under

activities

the

(12) Member States

should take into consideration any
anticipated reductions or limitations caused by project
activities
that affect an installation or activity and
would cause double counting when establishing their
national allocation plan methodology for determining
the allocation of individual installations.

(13)

The measures provided for
accordance with the opinion of
Committee,

in this Decision are in
the Climate Change

HAS ADOPTED THIS DECISION:

Article 1

This Decision lays down provisions for the implementation of
Article 11b(3) and (4) of Directive 2003/87/EC.

Article 2

For the purposes of this Decision, and in addition to the defi-
nitions laid down in Article 2 of Commission Regulation (EC)
No 2216/2004 (1), the following definitions shall apply:

Another set-aside should be established in the national
allocation plan for the period 2008 to 2012 of each
Member State intending to host activities under the
project-based mechanisms of the Kyoto Protocol which
could cause double-counting,
listing planned project
activities and its anticipated reductions or limitations of
emissions that take place in installations that participate
in the Community emissions trading scheme and for
which ERUs or CERs should be issued by the Member
State (‘trading sector project-reductions’). In addition, the
set-aside table should contain all explanatory information

1.

‘direct emission reduction or limitation’ means a reduction
or limitation of emissions occurring due to a project activity
which causes reductions or limitations of emissions in instal-
lations that are individually identified in the project activity’s
baseline established pursuant to Article 1 of Appendix B to
Framework
Decision 16/CP.7 of
Conference on Climate Change (UNFCCC), or pursuant to
Article 44 of
the
UNFCCC;

the Annex to Decision 17/CP.7 of

the United Nations

(1) OJ L 386, 29.12.2004, p. 1.

L 316/14

EN

Official Journal of the European Union

16.11.2006

2.

3.

4.

emission reduction or

‘indirect
reductions or
falling under the scope of Directive 2003/87/EC that
not a direct emission reduction or limitation;

any
in installations
is

limitation’ means

limitations of

emissions

‘trading sector project-reduction’ means a reduction or
limitation in emissions of
installations falling under the
scope of Directive 2003/87/EC due to project activities for
which a Member State hosting the project activity issues
emission reduction units
certified emission
reductions CERs;

(ERUs) or

‘letter of approval’ means, in the case of project activities that
generate ERUs, a binding obligation undertaken in a written
form by the Member State hosting the project activity to
issue ERUs in accordance with the Member State’s national
guidelines and procedures for approving project activities as
referred to in Article 20 (a) of
the Annex to Decision
16/CP.7 of the UNFCCC; and in the case of project activities
that generate CERs, a written approval of voluntary partici-
pation from the designated national authority of the Member
State hosting the project activity as referred to in Article
40(a) of the Annex to Decision 17/CP.7 of the UNFCCC;

5.

‘letter of endorsement’ means an official communication in a
written form by the Member State to host the project activity
that it considers the project as one with a potential to gain
eventual approval as a project activity.

Article 3

In its national allocation plan for the period 2008 to
1.
2012, a Member State shall
include in the total quantity of
allowances a set-aside of allowances drawn up for each
project activity in the format set out in the table in Annex I
to this Decision if, prior to the deadline for the notification of
its national allocation plan set out in Article 9(1) of Directive
2003/87/EC, the Member State has issued letters of approval as
a host country, pledging to issue ERUs or CERs for project
activities which result in emission reductions or limitations in
installations falling under the scope of Directive 2003/87/EC.

intends to issue letters of approval as a host country that pledge
to issue ERUs or CERs before 31 December 2012 for project
activities which result in emission reductions or limitations in
installations falling under the scope of Directive 2003/87/EC.
Planned project activities using the same methodology to reduce
emissions for which no letter of endorsement has been issued
yet may be grouped together under one column in the set-aside
table drawn up according to Annex II.

3.
Until a decision pursuant to Article 11(2) of Directive
2003/87/EC has been taken by the Member State, but at the
latest until the deadline for that decision in Article 11(2) of
Directive 2003/87/EC, further allowances may be transferred
from the set-aside established pursuant to Article 3(2) to the
that cover the
set-aside established pursuant
trading sector project-reductions of projects for which the
letter of approval has been issued after the deadline for the
notification of its national allocation plan set out in Article
9(1) of Directive 2003/87/EC.

to Article 3(1)

Article 4

The set-aside table shall be made available on the publicly
accessible website of a Member State's registry.

Article 5

ERUs and CERs that represent

1.
trading sector project-
reductions may be issued up until 31 December 2012,
provided that each such issuance is preceded by the conversion
of an equivalent amount of allowances from one of the set-
asides into assigned amount units and the Commission is
informed thereof.

that

that

to Article 3(1)

The quantity of allowances in the set-aside established
2.
pursuant
is not converted into
assigned amount units in accordance with Article 5(1) until
31 December 2012 may be sold as 2008-2012 period
allowances.
emission
If
reductions and limitations,
this quantity may be issued as
2008-2012 period allowances to the installations identified in
rows VII/a-VII/b of the table in Annex I.

the project activity causes direct

2.
In its national allocation plan for the period 2008 to
2012, a Member State may also include in the total quantity
of allowances an additional set-aside of allowances drawn up in
the format set out in the Annex II to this Decision if after the
decision pursuant to Article 11(2) of Directive 2003/87/EC it

3.
Any allowances in the set-aside established pursuant to
Article 3(2) that that are not converted into assigned amount
units in accordance with Article 5(1) until 31 December 2012
shall be cancelled.

16.11.2006

EN

Official Journal of the European Union

L 316/15

Article 6

A Member State wishing to approve project activities as a
1.
host country after the deadline for the submission of
the
national allocation plan shall inform the Commission thereof,
prior to the issuance of the letter of approval. This information
shall be accompanied by a report of an independent verifier
which verifies that any ERUs or CERs to be issued do not
result in double counting, in doing so providing all necessary
information ensuring that the project activities submitted for
approval are in compliance with Article 11b of Directive
2003/87/EC.

Letters of approval issued in accordance with Article 3(2)
2.
and letters of endorsement issued after the deadline for the
notification of the national allocation plan set out in Article
9(1) of Directive 2003/87/EC for project activities that will
result
shall assign the
allowances that are to be converted into assigned amount

in trading sector project-reductions

units from the set-aside established pursuant to Article 3(2) in
the event of the issuance of ERUs or CERs. If an allowance was
already assigned by a letter of approval to a particular project
activity for future conversion, it cannot be reassigned to another
project afterwards.

Article 7

This Decision is addressed to the Member States.

Done at Brussels, 13 November 2006.

For the Commission

Stavros DIMAS
Member of the Commission

L 316/16

EN

Official Journal of the European Union

16.11.2006

ANNEX I

Project
activity
X

Project
activity
Y

…

Total quantity of
allowances
in set-aside

I/a

I/b

I/c

II

III

IV

V

Title of project activity (1)

Project identification code of project activity (2)

Date of letter of approval for the project activity

Total quantity of GHG to be reduced or limited
(in tons for 2008-2012)

% of total reductions that the government issues as ERUs or
CERs

Description of baseline (3)

% of emissions of installations covered by Directive 2003/87/EC
in the total emissions included in the baseline (in case of indirect
reductions or limitations, an estimate is to be provided) (4)

VI

Planned trading sector project-reduction quantity (II*III*V)

(Σ VI) =
(Σ VIII/a-VIII/e)

VII/a

VII/b

For direct reductions and limitations, the name of the installation
where the trading sector project-reduction will occur (5)

For direct reductions and limitations, the installation ID of the
installation where
the trading sector project-reduction will
occur (5)

VIII/a

Quantity of ERUs or CERs that represent trading sector project-
reductions issued for 2008

VIII/b Quantity of ERUs or CERs that represent trading sector project-

reductions issued for 2009

VIII/c

Quantity of ERUs or CERs that represent trading sector project-
reductions issued for 2010

VIII/d Quantity of ERUs or CERs that represent trading sector project-

reductions issued for 2011

VIII/e

Quantity of ERUs or CERs that represent trading sector project-
reductions issued for 2012

(1) List all project activities approved by the Member State.
(2) Use the code assigned according to Annex VI, point 19 of Regulation (EC) No 2216/2004.
(3) Give the total annual emissions that are expected to occur in the absence of the project activity, and the group of installations where
these emissions are expected to occur. Attach a short description of the baseline applied. If more than one baseline is applied in the
project activity, each baseline (with the corresponding total annual emissions expected in the absence of that part of the project activity)
needs to be entered on a separate line in the set-aside table.

(4) Provide a brief description of the method and data used for the estimate.
(5) If more than one installation is to be listed in rows VII/a and VII/b, use separate rows. The share of each installation in the allowances

in the set-aside is to be calculated separately.

16.11.2006

EN

Official Journal of the European Union

L 316/17

ANNEX II

Planned
project
activity
X

Planned
project
activity
Y

…

Total quantity
of allowances
in set-aside

I/a

I/b

I/c

I/d

II

III

IV

V

VI

VII/a

VII/b

VII/c

VIII

Title of planned project activity (1)

Project identification code of planned project activity (1) (2)

Date or projected date of letter of endorsement for the planned
project activity

Projected date of letter of approval for the planned project activity

Planned total quantity of GHG to be reduced or limited (in tons
for 2008-2012) by the planned project activity

% of total reductions that the government issues as ERUs or CERs
for the planned project activity

Description of baseline (1) (3)

Estimate of the % of emissions of installations covered by Directive
2003/87/EC within the total emissions included in the baseline (4)

Planned trading sector project-reduction quantity (II*III*V)

(Σ VI)

For direct reductions and limitations, the name of the installation(s)
where the planned trading sector project-reduction is to occur (5)

For direct reductions and limitations, the installation ID of the
installation(s) where the planned trading sector project-reduction
is to occur (5)

For indirect reductions and limitations, the activity category where
the planned trading sector project-reduction is to occur (6)

The quantity of allowances deducted from the allocation of the
installations/activity category indicated under rows VII/a-VII/c to
fill the set-aside (5) (6)

(1) This information only needs to be provided if already available by the time of the submission of the national allocation plan. If no
letter of endorsement was issued yet for a project activity, more project activities using the same methodology to reduce emissions may
be grouped together under one column.

(2) Use the code assigned according to Annex VI, point 19 of Regulation (EC) No 2216/2004.
(3) Give the total annual emissions that are expected to occur in the absence of the project activity, and the group of installations where
these emissions are expected to occur. Attach a short description of the baseline applied. If more than one baseline is applied in the
project activity, each baseline (with the corresponding total annual emissions expected in the absence of that part of the project activity)
needs to be entered on a separate line in the set-aside table.

(4) Provide a brief description of the method and data used for the estimate.
(5) If more than one item is to be listed in rows VII/a, VII/b and VIII, use separate rows. The share of the allowances provided by each

installation for the set-aside is to be indicated separately.

(6) Use the categories of activities defined in Annex I of Directive 2003/87/EC.