News, 22 October 2008

The UNFCCC secretariat is pleased to announce the successful linking of the national registries of Liechtenstein and Norway with the International Transaction Log (ITL).

The national registries of Norway and Liechtenstein joined thirty national registries that were already “Live” with the ITL together with the CDM registry, expanding further the Kyoto Protocol registry system.

Emission targets for industrialized country Parties to the Kyoto Protocol are expressed as levels of allowed emissions, or “assigned amounts”, over the 2008-2012 commitment period. Such assigned amounts are denominated in tonnes (of CO2 equivalent emissions) known informally as “Kyoto units”.

The ability of Parties to add to their holdings of Kyoto units (e.g. through credits for CDM or LULUCF activities) or move units from one country to another (e.g. through emissions trading or JI projects) requires registry systems that can track the location of Kyoto units at all times.

Two types of registry are being implemented:

• Governments of the 38 Annex B Parties are implementing national registries, containing accounts within which units are held in the name of the government or in the name of legal entities authorized by the government to hold and trade units.
  
• The UNFCCC secretariat, under the authority of the CDM Executive Board, has implemented the CDM registry for issuing CDM credits and distributing them to national registries. Accounts in the CDM registry are held only by CDM project participants, as the registry does not accept emissions trading between accounts.

In addition to recording the holdings of Kyoto units, these registries “settle” emissions trades by delivering units from the accounts of sellers to those of buyers, thus forming the backbone infrastructure for the carbon market.

Each registry will operate through a link established with the International transaction log put in place and administered by the UNFCCC secretariat. The ITL verifies registry transactions, in real time, to ensure they are consistent with rules agreed under the Kyoto Protocol. The ITL requires registries to terminate transactions they propose that are found to infringe upon the Kyoto rules.

In verifying registry transactions, the ITL provides an independent check that unit holdings are being recorded accurately in registries. After the Kyoto commitment period is finished, the end status of the unit holdings for each Annex B Party will be compared with the Party’s emissions over the commitment period in order to assess whether it has complied with its emission target under the Kyoto Protocol.

Domestic or regional emissions trading schemes that use Kyoto units also undertake their settlement through these registry systems. For example, under the second phase of the European Union emissions trading scheme, EU allowances are specific Kyoto units which have been designated as being valid for trading under the scheme. Transactions in EU allowances are therefore recorded automatically as transactions under the Kyoto Protocol.

As EU trading legislation sets in place rules over and above those agreed for the Kyoto Protocol, a supplemental transaction log has been implemented by the European Commission. The Community Independent Transaction Log has been in place since the start of the scheme in 2005 and EU registries are now operating with it.

For the start of the Kyoto commitment period in 2008, EU registries are to switch their connections from the CITL to the ITL. The ITL will conduct “Kyoto checks” on transactions proposed by both EU and non-EU registries. In the case of transactions involving EU registries, the ITL will forward information to the CITL so that it can conduct “supplementary checks” defined under the EU scheme.

22 September 2008

The European Commission (EC), EU member States and the secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) have completed the last preparatory phases of setting up a live connection between the Community Independent Transaction Log (CITL), the UNFCCC International Transaction Log (ITL) and member State registries.   The final connection process between the ITL and CITL will start on 6 October at 8:00 am CEST and is expected to take at least 10 calendar days. During this period no transactions will be possible through the CITL.

Once complete, the connection will enable account holders to import and use Certified Emission Reduction units (CERs) and Emission Reduction Units (ERUs) from non-EU registries. Member State registries will also be able to issue ERUs and export those ERUs to non-EU ETS registries.  After completion of the ITL-CITL link, a notice period of at least 12 hours will be given before transactions are processed through the CITL, ITL, and EU member State registries. In this regard, the EC and the UNFCCC secretariat will issue an update on 16^th October 2008 which will be displayed on this website.

August 2008

The UNFCCC secretariat, in close cooperation with the European Commission, has completed successfully a major round of extensive technical tests relating to the linking of UNFCCC's International Transaction Log (ITL) and the Community Independent Transaction Log (CITL). These tests took place from 18 July to 4 August 2008. In addition to the ITL and the CITL, the national registries of the member States of the European Union (EU), the registry of the European Community and three registries of non-EU countries took part in the tests. The UNFCCC secretariat confirms that the preparations are on schedule and, following satisfactory completion of the remaining preparatory work, the linking of EU's registries and CITL to UNFCCC's ITL can start in the first half of October this year.