Types of units

The emissions trading system has various types of units. See below for an overview of the key types.

  • European Union Allowance (EUAs): Allowances allocated to companies; these allowances also enter the market via auction. Both companies and aircraft operators can use unlimited EUAs to compensate for their emissions.
  • Aviation European Union Allowance (AEUAs): Allowances allocated to aircraft operators; these allowances also enter the market via auction. Only aircraft operators can use AEUAs to compensate for their emissions. No limit applies to the use of AEUAs.
  • Certified Emission Reduction (CERs): Credits originating from Clean Development Mechanism (CDM) projects. These projects limit greenhouse gas emissions in countries not bound to the Kyoto protocol. Subject to certain limits, companies and aircraft operators can exchange valid CERs for EUAs and AEUAs.
  • Emission Reduction Units (ERUs): Credits originating from Joint Implementation (JI) projects. These projects limit greenhouse gas emissions in countries bound to the Kyoto protocol. Subject to certain limits, companies and aircraft operators can exchange valid ERUs for EUAs and AEUAs.

Summary of unit types

EUA

Available for unlimited use to reach compliance targets by both companies and aircraft operators.

AEUA

Available for unlimited use to reach compliance targets, aircraft operators only.

Valid CER and/or ERU

Available for use by companies and aircraft operators to exchange for EUAs or AEUAs.

Invalid CER and/or ERU

Cannot be used by companies or aircraft operators for compliance purposes.

Validity of CERs and ERUs

Both CERs and ERUs draw a distinction between valid and invalid credits. Only valid CERs and ERUs may be used in the EU ETS and be held on all accounts in the registry. CERs and ERUs that may not be used in the EU ETS may only be held on Kyoto accounts.

Validity of CERs en ERUs

The following rules apply regarding the validity of CERs and ERUs in phase 3:

  • CERs and ERUs from nuclear energy projects, afforestation and reforestation projects and projects destroying industrial gases (HFC-23 and N2O adipic acid): these CERs and ERUs are not valid/ineligible in the EU ETS;
  • All other types of CERs and ERUs that represent reductions that have taken place up to and including 31 December 2012: these CERs and ERUs are not valid/ineligible in the EU ETS
  • All other types of CERs and ERUs from projects that are registered before December 31, 2012 and represent reductions that have taken place since January 1, 2013: these type of CERs and ERUs are valid and usable in the EU ETS in phase 3;
  • All other types of CERs and ERUs from projects that are registered after January 1, 2013: CERs and ERUs from projects that were registered with the United Nations Framework Convention on Climate Change are only valid and usable if the projects take place in so-called 'Least Developed Countries (LDCs)'. More information about LDCs can be found on this website of the United Nations.
  • The registry shows if the units on your account are eligible or ineligible in the EU ETS. This can be found in the tab ‘holdings’, as eligible and ineligible allowances are clearly separated,

The exchange of CERs and ERUs for EUAs is not allowed in phase 4 of the EU ETS (2021-2030).