German Emissions Trading Authority

Emission allowances and Kyoto certificates

Emission allowances (EU allowances, EUA) are the key certificates of the EU emissions trading system. Their equivalents in the international context at the UN level are referred to as Kyoto certificates of which there are different types.

Allocation of EU Allowances

Every year, the German Emissions Trading Authority (DEHSt) at the German Environment Agency allocates a portion of the EU allowances (EUA) to installation operators and aviation allowances (aEUA) to aircraft operators who have received a positive allocation notice. Installation operators receive 0-5 EUA (General Allowances, also referred to as Chapter-III-allowances), aircraft operators receive 0-6 aEUA (Aviation Allowances, also called Chapter-II-allowances). For further explanation about the properties of the different certificate types and their designation, see the information box on the right side.

These allowances are valid within the trading period for which they were issued. This means that regardless of the year in which the EUA/aEUA were issued, they can be surrendered for each year of the according trading period. One element of their serial numbers indicates the trading period for which the allowances are valid.

When the trading period 2008-2012 ended, EUA/aEUA which have not been surrendered or deleted were automatically replaced with EUA/aEUA of the new trading period 2013-2020.


EUA and aEUA can only be held in EU accounts

Between EU-ETS accounts and those of the Kyoto section in the Union Registry (or other Kyoto registries) transactions with CER and ERU (or other Kyoto certificate type) can take place only. Transactions involving 0-5 EUA (general allowances) and 0-6 aEUA (aviation allowances) are strictly limited to the EU-ETS section. This means that they can only be held in accounts whose account identifier starts with EU-100.


The use of CER and ERU in the EU ETS

Exchange Transaction

In order for 3-0 ERU and 5-0 CER to be available for surrender, these Kyoto certificates must first be converted into 0-5 EUA respectively 0-6 aEUA in the Union Registry. This is not automatic but must be initiated by the authorised representative.

In the Union Registry the request for exchange is initiated by a transaction from an installation or aircraft operator account to a specific exchange account. In return, the original account will be credited an equal amount of 0-5 EUA (if the exchange transaction was carried out from an operator holding account) or respectively 0-6 aEUA (if the exchange transaction was carried out from an aircraft operator holding account) for surrender. This exchange transaction is not possible from person holding accounts, trading accounts or former operator holding accounts in national Kyoto registries.

Upper Limit for Exchange of CER and ERU

Installation and aircraft operators can exchange EU-ETS valid CER and ERU into EUA and aEUA, respectively up to the upper specified limit within the Union Registry. The upper limit is calculated according to the "Regulation on determining international credit entitlements" (RICE, Regulation (EU) 1123/2013).

Each installation or aircraft operator can view their permitted upper limit directly in the Union Registry. An exchange may only be made after entry and confirmation of the verified emissions for the respective reporting year in the Union Registry provided that the permitted upper limit for an installation or aircraft operator is calculated exclusively from the verified emissions for the third trading period. The upper limit for these installations is 4.5 percent of their verified emissions from 2013 to 2020 (according to Article 1 paragraph 2 RICE). All other installations may use CER and ERU up to the remaining limit from the second trading period (2008-2012) until 2020 (according to Article 1 paragraph 1 RICE).
The Union Registry automatically indicates the higher upper limit for installations as long as the entitlement is calculated according to RICE’s specifications, either from the entitlement in the second trading period (2008-2012) or from the verified emissions during the third trading period (2013-2020) (according to Article 1 paragraph 3 and 4 RICE).

The upper limit for aircraft operators is 1.5 per cent based on their verified emissions in 2013-2020 (according to Article 1 paragraph 5 RICE). A limit not utilised in 2012 will be added. In 2012 they had a limit of 15 percent based on verified emissions.

Publication of the German ICE table

As the competent authority, DEHSt published an installation list in which the initial upper limits for the exchange of CERs and ERUs are indicated (ICE table). The publication was carried out according to RICE’s specifications, therefore, no aircraft operators have been considered in the published ICE table. Their upper limit is calculated from the verified emissions in the 2012-2020 period. In addition, such stationary installations whose upper limit is necessarily derived from the verified emissions in the 2013-2020 period according to RICE’s specifications were not included in the publication either.

Thus, the published ICE table contains only stationary installations that already had an international credit entitlement in the second trading period. The stated upper limit per installation reflects the initial total entitlement approved by the European Commission for the 2008-2020 period. Please note that the entitlement to exchange CERs and ERUs is exclusively derived from the indicated status in the Union Registry.

This is stipulated in EU regulation 1123/2013 (RICE).

Projects not allowed in the EU-ETS

Article 11(1 to 5) of the Emissions Trading Directive 2003/87/EC regulates the applicability of CER and ERU from certain trading periods and projects. In the EU-ETS, CER and ERU from the following projects are not eligible for conversion since 01/05/2013:

  • CER and ERU from HFC-23 and adipic acid projects
  • ERU, which were created after 30/04/2013 for emission reductions in 2008-2012 and originate from JI-Projects from activities that were newly included in EU-ETS from 2013
  • ERU, which were created since 01/01/2013 for emission reductions in 2008-2012 in countries that have not yet adopted any new reduction commitments for the second commitment period of the Kyoto Protocol. Additionally the project according to the Track 1 procedure was not verified by an Accredited Independent Entity (AIE).

CER and ERU from the 2nd Kyoto commitment period of 2013-2020 can, in addition to the above mentioned limitation, be converted in only two cases in the EU-ETS: if the CER or ERU come from projects registered prior to 01/01/2013 or if they come from projects registered from 2013 onward, which take place in Least Developed Countries (LDCs).

If you want to use CER and ERU in the EU ETS please notice the detailed explanations by the EU Commission. The EU Commission has also published positive and negative lists of international projects. These lists are updated regularly. The general positive list contains the project IDs of JI and CDM projects valid for the use in the EU ETS. The specific positive list contains besides the project IDs also the start and end block of the serial numbers, for projects which are not in general valid for the use in the EU ETS, but restricted to specific serial numbers. To be valid for the use in the EU ETS CER and ERU must be on one of the two positive lists. The published version of the specific positive list does not contain serial numbers because of rules in the registry regulation.

Kyoto-Banking of CER and ERU

As mentioned above, CER and ERU from 2008-2012 had to be converted by 31/03/2015 in order to be usable in the EU-ETS. Therefore the Kyoto-Banking of CER and ERU has become meaningless for the EU-ETS. CER and ERU which have passed the Kyoto-Banking are valid again in the second Kyoto commitment period in the Kyoto-System but generally cannot be used for exchange in EU-ETS.

Also read our factsheet on the topic concerning the use of CER and ERU of the second Kyoto commitment period 2013-2020.

Surrendering emission allowances

Installation and aircraft operators have to submit a verified emissions report until 31/03 of a given year for emissions from the previous year directly to the DEHSt.

By 31/03, the verifiers must enter the previous year's verified emissions for the installation or the aircraft operator into the corresponding account of the Union Registry. In order for the verifiers to be able to do this, operators need to assign their accounts in the Union Registry to the verifier. The verifier must confirm the assignment and can then make the entry or approval.

By 30/04 of a given year, the installation operator or aircraft operator has to surrender the number of EU allowances corresponding to their actual emissions (in tonnes) during the previous year. This takes the form of a separately marked transaction (surrendering) from operator holding or aircraft operator holding accounts.

Installation operators can use 0-5 EUA for surrendering. Aircraft operators may also use 0-6 aEUA.


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