Installations and airlines are allowed to use CERs from Kyoto Protocol projects (CDM or JI) for compliance in the EU ETS. The number of Kyoto credits which can be used depends on the rules of different member states. In Phase II, this varied mainly between 0% - 22% of the allocation across the EU for stationary installations and it was a fixed 15 % of the verified emissions for the aircraft operators.

In Phase III, stationary installations can also use Kyoto credits. The number that can be used in Phase III is (A) the higher of (i) the number which could be used in Phase II and (ii) 11% of the total allocation in Phase II (B) less the number if Kyoto credits actually used for compliances in Phase II. Aircraft operators also shall be able to use credits up to an amount corresponding to a percentage, which shall not be set below 1.5 %, of their verified emissions during the period from 2013 to 2020.

The opportunity

As Kyoto credits cost less than EUAs, installations can save money by purchasing and using Kyoto credits rather than EUAs for compliance. The EUA-CER spread is the difference in price between EUAs and CERs. Historically this has ranged between €1 and €10. Check the current spread on myvertis.com.

As a result of this, many companies like to swap EUAs for Kyoto credits by selling EUAs and simultaneously buying Kyoto credits. It is a risk-free way of raising additional cash or compliance units. Some companies also trade the spread, buying and selling the spread as it moves up and down.

Please download the VERTIS SWAP TRANSACTION (PDF, 87.5 KB) product sheet.

vertis blog

Vertis Poland – within reach
12 July 2017
Vertis brings its award winning services closer to you and opens its first office in Warsaw, Poland. Regulatory and market...
EUA Dec17: The weakest performer of the energy commodities in 1H2017
05 July 2017
EUA price development In 2017 and in 2016, the benchmark carbon contract had a similar start to the year. As auction volumes...
Save the date: 6th July talk by Paul Bodnar, Rocky Mountain Institute
03 July 2017
On 6th July we are holding the next event in our series of talks. Paul Bodnar, Managing Director of the Rocky Mountain Institute...

trading room

EUA Dec17: New 4-month high reached last week
17 July 2017
The benchmark carbon contract hit a new 4-month high and gained 1.5% last week helped by stronger fundamentals. The EUA...
EUA Dec17: Consolidation near the 5 euro level expected
03 July 2017
The benchmark carbon contract got support from strong auctions and higher power prices last week. As a consequence, it climbed...
EUA Dec17: Market expects progress in trilogue on Tuesday
26 June 2017
Although the supply of allowances increased by more than 70% in a weekly comparison, the benchmark carbon contract only...

the bustard blog