The salient qualitative difference as regards CERs and ERUs use in the EU ETS third trading period, as compared to the years 2008-2012, is that as from 2013 CERs and ERUs no longer are compliance units within the EUETS but are exchangeable with EUAs. The modalities for this exchangeability pursuant to the Article 11a of the EU ETS Directive are quite differentiated.
Article 60 of the Commission Regulation No 389/2013
Use of international credits through allowance exchange
1. An operator may request the exchange of an international credit for a general allowance pursuant to Article 11a(2) of Directive 2003/87/EC until 31 March 2015 and pursuant to Article 11a(3) and (4) of that Directive until 31 December 2020. It shall propose a transfer of international credits from the relevant operator holding account to the EU International Credit Account for operators in the Union Registry.
An aircraft operator may request the exchange of an inter national credit for an aviation allowance pursuant to Article 11a(2) of Directive 2003/87/EC until 31 March 2015 and pursuant to Article 11a(3) and (4) of that Directive until 31 December 2020. It shall propose a transfer of international credits from the relevant aircraft operator holding account to the EU International Credit Account for aircraft operators in the Union Registry.
2. Upon a request, the central administrator shall ensure that the Union Registry carries out a transfer of international credits to the relevant EU International Credit Account if:
(a) the transfer is allowed by the status of the initiating account;
(b) the relevant international credit entitlement table has been entered into the EUTL and the operator or aircraft operator has an entry in the table pursuant to Article 59;
(c) the number of units proposed in the transfer does not exceed the remaining credit entitlement pursuant to Article 61;
(d) all units proposed in the transfer are eligible for use pursuant to Articles 11a and 11b of Directive 2003/87/EC, Article 58 of this Regulation and any measures adopted pursuant to Article 11a(9) of Directive 2003/87/EC.
3. Upon completion of the transfer pursuant to the first subparagraph of paragraph 1, the central administrator shall ensure that the Union Registry creates an equivalent number of general allowances on the EU Credit Exchange Account for operators and transfers, on behalf of the relevant competent authority, an equivalent number of general allowances to the operator holding account from which the transfer was initiated.
Upon completion of the transfer pursuant to the second subparagraph of paragraph 1, the central administrator shall ensure that the Union Registry creates an equivalent number of aviation allowances as appropriate on the EU Credit Exchange Account for aircraft operators and transfers, on behalf of the relevant competent authority, an equivalent number of aviation allowances to the aircraft operator holding account from which the transfer was initiated.
The Commission’s Staff Working Document of 25 July 2012 intended the exchange process be defined in the amendment of the emission allowances registry regulation (as a part of actions to finalise the preparation of Phase 3).
The said amendment was presented by the European Commission communication of 10 January 2013 submitted to the Climate Change Committee, accompanied by the legislative proposal to update the Registry Regulation. The proposal introduced the date 1 May 2013 as the point in time therefrom the operator or aircraft operator may require the exchange of the above-mentioned CERs and ERUs for third phase general allowances or aviation allowances.
Article 60 of the said Commission Regulation No 389/2013 sets out technical details for the the CERs and ERUs exchange (see box).
Requirements laid down by the new registry provisions incorporate qualitative restrictions on CERs and ERUs use ("all units proposed in the transfer are eligible for use pursuant to Articles 11a and 11b of Directive 2003/87/EC, Article 58 of this Regulation and any measures adopted pursuant to Article 11a(9) of Directive 2003/87/EC").