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Forest offsets remain excluded from ETS – for now

FERN’s EU Forest Watch reports on the EU Emissions Trading Scheme directive, which was adopted on 17 December 2008. Forest credits are excluded from the ETS until at least 2020. This is good news, although they should be excluded after 2020 as well.

The EU’s target of 20 per cent emission reductions by 2020 is already too weak. The EU needs to reduce dramatically its greenhouse gas emissions, not use the offsets scam to allow industry to continue polluting.

Forest offsets remain excluded from ETS – for now

EU Forest Watch, Issue 134, January 2009.

As part of the EU’s climate change package,¹ the EU Emissions Trading Scheme (ETS) directive² was adopted on 17 December 2008. Despite language suggesting the EU may wish to include forest credits at a later stage, it is clear that the revised ETS will not include forest credits until at least 2020. However, the directive can still be amended after a Commission report assessing afforestation, reforestation, avoided deforestation and forest degradation in third countries. This is to be presented within three months of signing a UNFCCC agreement.

The final text is a clear improvement on Parliament’s original proposal to include forest offsets in the ETS, which, in FERN’s view, would have had negative effects on forests, the climate and the ETS’ credibility. Still, by allowing offsetting of up to 50 per cent of EU-wide reductions for 2008-20 – offsets that combine real and hypothetical efforts in third countries – the directive will create a significant ‘carbon credit trap.’ Guiding principles for offset credits are meant to ensure that offsets are ‘real, verifiable, additional and permanent,’ but experience with the Kyoto Protocol’s CDM demonstrates that this is unlikely to be the case.

The directive supports the establishment of an internationally recognised system for reducing deforestation and increasing afforestation and reforestation within the context of the post-2012 climate agreement. Yet by accepting offsets, the directive will, at best, only neutralise a tiny percentage of emissions instead of requiring a real U-turn toward a low-carbon economy.

[1] Included in the climate package were: the revision of the EU Emission Trading Scheme; the effort-sharing decision; the carbon capture and storage (CCS) legal framework; the renewable energies directive; the regulation on CO2 emissions from cars and the fuel quality directive.



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