U.N. bans Romania from trading its CO2 rights

Reuters News
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Posted: Aug 28, 2011 6:38 AM

BUCHAREST (Reuters) - A U.N. panel suspended Romania from trading its surplus carbon emission rights for breaching Kyoto Protocol rules on reporting emissions, the country's environment ministry said on Sunday.

The compliance committee of the UNFCCC was sitting in a week-long meeting in Bonn, Germany and decided to suspend Romania from trading assigned amount units (AAUs) after a preliminary hearing in July, when it found the country did not report its national emissions inventory properly.

The Kyoto Protocol assigned emissions caps to developed countries from 2008-12 through a quota of carbon permits or credits. Under that agreement, governments comfortably beneath their targets can sell the difference in the form of AAUs.

Romania -- which only enacted legislation to sell the credits last year -- lost the chance to sell its surpluses of 200 million rights at a 2008 market peak of 10 euros per credit because they did not have green investment schemes in place. The credits' price has fallen to about half the price.

"Romania will prepare a revised version of the national inventory and send it to the UNFCCC and based on its evaluation will then ask to reinstall eligibility as soon as possible," the environment ministry said in a statement.

Prime Minister Emil Boc has said he will fire the head of the country's environment protection agency for getting Romania suspended. He also said he wanted measures to be taken so trade could be reinstated in up to six months.

Earlier this month the U.N. panel said in a preliminary ruling that Ukraine had also breached Kyoto Protocol rules on reporting emissions.

(Reporting by Ioana Patran; Editing by David Holmes)