The regulatory framework for using project-based mechanisms consists of laws and procedures at the international level of the United Nations (UNFCCC), at the European (EU) level, and the national level in Germany.
Under the UNFCCC, the Parties have agreed on the establishment of a framework for CDM and JI project mechanisms and have developed procedures accordingly. These are subject to continuous reform by the Conference of the Parties to the Kyoto Protocol and the CDM Executive Board. The CDM Executive Board's responsibilities include the review and registration of CDM activities and the issuing of carbon credits, the approval of methodologies and accreditation of experts (DOE).
At the EU level, the use of credits from CDM is governed by the Emissions Trading Directive, as amended by the Linking Directive. The latter allows plant operators participating in EU emissions trading to meet part of their climate change obligations through CDM activities. Early on, the EU also allowed this to go beyond the first obligation period up to 2020. At the same time, special regulations apply for the use of CERs for the third trading period from 2013 onward.
The implementation of EU guidelines on the flexible mechanisms into national law in Germany is regulated by the "Law on project-based mechanisms under the Kyoto Protocol to the United Nations Framework Convention on Climate Change of 11 December 1997 "(the so-called Project Mechanisms Act, ProMechG), the Greenhouse Gas Emissions Trading Act (TEHG) and the Emissions Trading Ordinance 2020 (EHV 2020). Starting with the third trading period, these laws allow plant operators to exchange CER and ERU into EUA and use them to fulfil their obligation to surrender allowances
DEHSt is the competent authority for the approval of projects by Germany as an investor country.