The EU Emission Trading System (EU ETS) Registry and the Danish Emission Trading Registry are two separate entities. The EU ETS registry contains allowances and the Kyoto registry contains credits issued by the UN. The electronic units represent one ton of greenhouse gases which can be used to cover emissions from companies obligated to participate in the EU-ETS. These two registries are commonly referred to as the Emission Trading Registry.
The EU ETS came into effect on 1 January 2005. In October 2008, the European system was linked to the UN emission trading system, the Kyoto Registry.
Because emission allowances and credits exist only as electronic units, electronic registries are needed in which to store these allowances and credits and register to whom the allowances and credits belong. The various emission registries are linked in an electronic network, which makes it possible to exchange allowances and credits between the registries’ accounts.
The Danish EU ETS Registry
The European Union’s ETS Registry is established pursuant to Directive 2003/87/EC. The registry ensures the meticulous accounting of emission allowances issued within the EU. The registry keeps track of the ownership of these allowances, which can only be held in electronic accounts in the registry. Each EU member state manages its own separate section of the EU ETS Registry. In Denmark, the Danish Business Authority manages all Danish accounts in the EU ETS Registry.
The main purpose of the EU ETS Registry is to keep an account of the operators covered by the EU ETS Directive.
The directive was transposed into Danish law by the Danish Emission Allowances Act (Lov om CO2-kvoter), which is administered by the Danish Energy Agency and the Danish Business Authority.
The EU ETS Registry is technically operated by the European Commission, which places the registry at the disposal of the member states.
Accounts in the Danish EU ETS registry
Accounts in the Danish EU ETS Registry may trade with CO2 emission allowances and cannot receive carbon credits (CER´s). However, if EU ETS accounts did receive CER´s before January 1st, 2021, those credits can remain on EU ETS accounts until the Kyoto protocol has been ended, but can only be deleted.
Operator holding accounts and aircraft operator holding accounts
All Danish companies and aircraft operators covered by the Danish Emission Allowances Act must have an operator holding account or an aircraft operator holding account in Denmark’s section of the EU ETS Registry. This account is to be used for registering the specific company’s or aircraft operator’s emission of greenhouse gases, and once a year, the companies and aircraft operators must surrender to the Danish State the number of emission allowances that correspond to their emission of greenhouse gases in the preceding year.
The Danish Energy Agency will automatically inform the Danish Business Authority of which companies and aircraft operators are covered by the Danish Emission Allowances Act. After this, the Danish Business Authority will directly contact the companies and aircraft operators concerning the establishment of an account.
Trading accounts
Emission allowances can be traded freely. For this reason, the ETS Directive also makes it possible for other Danish companies or persons resident in Denmark, to create trading accounts in the EU ETS Registry. In order to have trading accounts in the Danish EU ETS Registry, a company or a person must have Danish VAT registration.
Verifier access
In addition to the above, the Danish EU ETS Registry also has access for verifiers, which can be used solely to verify greenhouse gas emissions related to operator holding accounts and aircraft operator holding accounts.
The Danish Kyoto Registry
The Kyoto protocol is being phased out. The Danish Kyoto Registry was established to keep an account of the Danish State’s climate commitments under the Kyoto Protocol.
Carbon credits (CER's) were created by investing in authorized climate projects approved by the UN. Those projects aimed at reducing emissions of greenhouse gases or increasing the absorption of carbon dioxide, and the benefit in terms of carbon emissions was then converted into credits.
In Denmark, the competent authority in relation to the Kyoto Protocol is the Danish Ministry of Climate, Energy and Utilities.
Accounts in the Danish Kyoto registry
Person holding account
Although the Kyoto protocol is in the closing phase it is still possible for any legal or natural person who wishes to create a person holding account in the Danish Kyoto Registry to do so.
Accounts in the Danish Kyoto Registry may only contain carbon credits (CER's), i.e. they may not contain general emission allowances (EUA's) or aviation allowances (AEUA's). General emission allowances are valid as units only under the EU Emission Trading System and for this reason can only be held in accounts in the EU ETS Registry. Since September 9th 2023, transactions of CERS´s (credits) between different national registries are no longer possible. CER´s can still be transferred between accounts in the same national Kyoto registry, if the accounts are of the same type, e.g. DK-121-XXXX-0-X. Carbon credits may be held in the Kyoto registry until the registry will be closed.