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8.6.2011 Official
Journal
of
the
European
Union L
149/1
II
(Non-legislative acts)
REGULATIONS
COMMISSION REGULATION (EU) No 550/2011
of 7 June 2011
on determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council,
certain restrictions applicable to the use of international credits from projects involving industrial
gases
(Text with EEA relevance)
THE EUROPEAN COMMISSION,
(2)
If we are to live up to this challenge, carbon markets will
have to play a key role. They will allow us to meet our
targets at a lower cost and also promote greater
ambition. In addition, carbon markets can be an
effective way to transfer finance to developing countries
Having regard to the Treaty on the functioning of the European
and help us meet the USD 100 billion international
Union,
finance package agreed in Copenhagen. This will
require substantial scaling up of existing mechanisms,
including the reform of the clean development
mechanism (CDM) to increase the use of standardised
baselines and the creation of new market mechanisms.
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 11a(9) thereof,
(3) The
Kyoto
Protocol,
which
was
approved
by
Council
Decision 2002/358/EC of 25 April 2002 concerning
the approval, on behalf of the European Community,
Whereas:
of the Kyoto Protocol to the United Nations
Framework Convention on Climate Change and the
joint fulfilment of commitments thereunder
( 3 ), set
emission reduction targets for 39 Parties for the period
2008-2012, and established two mechanisms for the
(1) The
ultimate
objective
of
the
United
Nations
Framework
creation of international credits that Parties may use to
Convention on Climate Change (UNFCCC), which was
offset emissions. Joint implementation (JI) provides for
approved by Council Decision 94/69/EC of
the creation of emission reduction units (ERUs),
15 December 1993 concerning the conclusion of the
whereas the clean development mechanism (CDM)
United Nations Framework Convention on Climate
provides for the creation of certified emission reductions
Change, (
(CERs).

2 ) is to stabilise greenhouse gas concentrations

in the atmosphere at a level that would prevent
dangerous anthropogenic interference with the climate
system. In order to meet that objective, the overall
global annual mean surface temperature increase should
not exceed 2 °C above pre-industrial levels as endorsed
by the Cancun Climate Change Conference in December
(4)
JI and CDM are so-called pure offsetting mechanisms,
2010 and the ‘Copenhagen Accord’. The latest Intergov
whereby a tonne of greenhouse gas emissions reduced
ernmental Panel on Climate Change (IPCC) Assessment
creates the right to emit a tonne of greenhouse gas
Report shows that, in order to reach this objective, global
elsewhere. While such systems generally help to reduce
emissions of greenhouse gases must peak by 2020. This
the cost of global abatement enabling action in countries
implies an increase in global efforts by all major emitting
where it is more cost-efficient, they do not assist in the
countries.
reduction efforts necessary to progress towards the 2 °C
target.
( 1 ) OJ L 275, 25.10.2003, p. 32.
( 2 ) OJ L 33, 7.2.1994, p. 11.
( 3 ) OJ L 130, 15.5.2002, p. 1.

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L 149/2
EN
Official Journal of the European Union
8.6.2011
(5)
To keep global warming below 2 °C, the Union has taken
decisions at international levels, should contribute to
the position that commitments by industrialised
reaching a more balanced geographical distribution of
countries should be complemented by appropriate miti
the benefits of the mechanisms established under the
gation action by developing countries, in particular the
Kyoto Protocol.
most advanced. In parallel, a broad international carbon
market should gradually develop that can deliver the
necessary global reductions in an efficient manner,
where international credits are generated for emission
reductions achieved below a benchmark that is set
below projected emissions in the absence of abatement
(8) Industrial
gas
projects
raise
environmental
concerns.
measures. This requires appropriate mitigation action by
Exceptionally high rates of return from the destruction
developing countries. While the participation of least
of HFC-23 has the consequence of stimulating the
developed countries in the CDM should be strengthened,
continued production and use of chlorodifluoromethane
more advanced developing countries should gradually
(HCFC-22), a potent ozone depleting and greenhouse gas
move towards participation in sectoral market
substance, in registered plants at the maximum level
mechanisms and ultimately in cap-and-trade systems ( 1 ).
allowed by the project activity methodology. As a
result, the production of HCFC-22 could be higher
than what it would have been in the absence of
project activities. This in turn undermines the ‘2007
Montreal Adjustment on Production and Consumption
of HCFCs’ under the Montreal Protocol on Substances
that Deplete the Ozone Layer (
(6)
Participation in the JI and CDM is voluntary, as are

3 ), to establish the accel
erated phase-out of HCFC-22 for non-feedstock use. It is
decisions to allow the use of credits in emission
also inconsistent with Member State financing of the
trading systems. There is therefore a distinction
phase-out of HCFC-22 production through contributions
between credits that may be generated, and credits that
to the multilateral fund under the Montreal Protocol.
signatories to the Kyoto Protocol may have decided to
These high rates of return result in distortions of
allow for use under their domestic legislation. To this
economic incentives and competition and in shifts in
effect, Directive 2003/87/EC already excluded the use
production from adipic acid producers established in
of assigned amount units, and Directive 2004/101/EC
the Union to registered producers in third countries.
of the European Parliament and of the Council ( 2 )
The much more favourable treatment of adipic acid
allowed the use of certain JI and CDM credits, with
producers participating in the Kyoto mechanisms than
harmonised restrictions on the use of international
those entering the Union scheme as of 2013 will
credits from nuclear, land-use and forestry projects, and
increase the risks of similar shifts in production, and a
provided that Member States may allow operators to use
net increase in global emissions. To reduce distortions of
certain quantities of other types of international credits.
economic incentives and competition and avoid
Directive 2003/87/EC provides for harmonised imple
greenhouse gas emission leakage, restrictions on the use
menting provisions to be adopted for restrictions on
of these international credits are justified.
the use of international credits.


(9) International
credits
from
industrial
gas
projects
do
not
(7) The
use
of
international
credits
from
projects
involving
contribute to technology transfer or to the necessary
trifluoromethane (HFC-23) and nitrous oxide (N 2 O) from
long-term transformation of energy systems in
adipic acid production (hereafter ‘industrial gas projects’)
developing countries. Abating these industrial gases
should be restricted. This is consistent with the October
through JI or the CDM does not contribute to reducing
2009 European Council conclusions urging developing
global emissions in the most efficient manner, because
countries, especially the more advanced, to take appro
the high returns by project developers are not used for
priate mitigation action. The vast majority of industrial
emission reductions.
gas projects are located in advanced developing countries
with sufficient capabilities to finance those cheap
reductions themselves, and the revenues gained from
those projects in the past should suffice to finance
them. The introduction of use restrictions for industrial
gas credits, in particular if followed by respective
(10) The application of full use restrictions of specific credits
is provided for in Article 11a(9) of Directive 2003/87/EC.
( 1 ) Council conclusions, Preparation for the 16th Conference of the
It is appropriate to apply such a restriction in the case of
Parties to the UNFCCC, Cancun (29.11-10.12.2010) 3036th
industrial gas projects. A full restriction of use best elim
Environment Council meeting, Luxembourg, 14.10.2010 and
inates undesirable competitive and environmental conse
Council conclusions EU position for the Copenhagen Climate
quences of those credits, improves the cost-efficiency of
Change Conference (7-18.12.2009) 2968th Environment Council
Meeting, Luxembourg, 21 October 2009 endorsed by the Presidency
conclusions of the Brussels European Council of 29/30 October
( 3 ) The Montreal Protocol on Substances that Deplete the Ozone Layer
2009.
as adjusted and amended by the 19th Meeting of the Parties to the
( 2 ) OJ L 338, 13.11.2004, p. 18.
Montreal Protocol (17-21 September 2007).

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EN
8.6.2011 Official
Journal
of
the
European
Union L
149/3
global emission reductions and the environmental
HAS ADOPTED THIS REGULATION:
performance of the carbon market by encouraging low-
carbon investments.
Article 1
From 1 January 2013, the use of international credits from
projects involving the destruction of trifluoromethane (HFC-
(11) In accordance with Article 11a(9) of Directive
2003/87/EC, the measures provided for in this Regu
23) and nitrous oxide (N 2 O) from adipic acid production for
lation should apply from 1 January 2013, which in
the purposes of Article 11a of Directive 2003/87/EC is
accordance with that Article is more than six months
prohibited, except for the use of credits in respect of emission
and less than three years from its date of adoption.
reductions before 2013 from existing projects of these types for
The use of industrial gas credits for compliance obli
use in respect of emissions from EU ETS installations that took
gations during 2012 is not affected by these measures.
place during 2012 which shall be allowed until 30 April 2013

inclusive.
Article 2
(12) The
measures
provided
for
in
this
Regulation
are
in
accordance with the opinion of the Climate Change
This Regulation shall enter into force on the day of its publi
Committee,
cation in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 7 June 2011.
For the Commission
The President
José Manuel BARROSO

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