Frequently Asked Questions on the Emissions Trading Registry
What is the goal of emissions trading?
The basic principles of emissions trading date back to an economic theorem developed by Ronald Coase (Coase Theorem). This theorem assumes that participants in a market are able to manage external costs if they can negotiate on the allocation of resources and can exchange them without costs.
On this basis, the economist J.H. Dales developed the basic idea of emissions trading, by proposing a market for pollution rights. Using this approach, policymakers were able to specify a specific upper threshold for pollution for the first time. In emissions trading, pollution rights correspond to emission allowances; one allowance entitles the bearer to emit 1 ton of CO2 equivalent. The price of the allowance is determined by the market.
Liechtenstein allocates allowances to the installation operators falling within the scope of the Emissions Trading Directive, the amounts of which are significantly below the actual planned emissions (reduction target). The operators are at liberty to carry out reduction measures themselves or to acquire the lacking emission allowances on the market. Emission mitigation measures are thus carried out where they can be implemented at the lowest cost. Emissions trading creates incentives for investments in CO2 -saving technologies and gives the enterprises more flexibility in achieving their targets. Overall, the costs are reduced for all enterprises integrated in the scheme.
Additionally, a new market for traders in emission entitlements, experts, and other service providers is created.
What allowances and emission credits can be traded where?
In the framework of the Kyoto Protocol and the Emissions Trading Directive, 8 different emission rights can be distinguished. They are characterized by their origin, their allowability toward the reduction target, and their transferability to later commitment periods.
Table 1: Detailed information emission rights; changed after Federal Office for the Environment (FOEN)
Emission allowances are EU Allowances (EUAs) allocated by the State to the installation operators. Allowances from projects in developing countries (CDM) or other industrial countries (JI) are called emission credits. The following table provides an overview of which emission rights are allowable in which scheme. All emission rights are freely tradable in all schemes.
Definitions of emissions rights
EUA : EU Allowances – Emission allowances allocated to the enterprises falling within the scope of Annex I of the Emissions Trading Directive. The allocation of the emission allowances to the individual enterprises is carried out via the registry of the appropriate EU/EEA Member State.
AAU : Assigned Amount Units – Emission rights allocated to individual States by the Kyoto Protocol for a commitment period. The allocated amount of AAUs is determined by the emission target to be met by States within the commitment period. In the Swiss system – analogous to the EU ETS – AAUs are passed on to Liechtenstein enterprises with reduction commitments in the framework of the CO2 Act.
RMU : Removal Units – Emission rights generated as a consequence of an increase in the national sink performance in addition to AAUs. Since sinks do not contribute to permanent CO2 reduction, RMUs are validated at the end of the commitment period.
ERU : Reduction Units – Emission credits generated through the realization of Joint Implementation (JI) projects between two industrialized countries.
CER : Certified Emission Reductions – Emission credits generated through the realization of CDM projects of industrialized countries in developing countries.
tCER : Temporary CER – An emission credit issued for a CDM project as part of a forestation or reforestation projects. tCERs expire at the end of the following commitment period and may be renewed as long as the binding of CO2 stored in forests can be proven by means of defined procedures.
lCER : Long-term CER – An emission credit granted for a CDM project as part of a forestation or reforestation project under CDM. lCERs expire at the end of the entire project duration and can therefore not be renewed. They must however be replaced by other emission credits if no evidence of CO2 binding is provided every five years.
Who can open and keep a trading account in the National Emissions Trading Registry?
Every natural and legal person is entitled to open an account in the National Emissions Trading Registry.
How is a trading account in the National Emissions Trading Registry opened?
All information and documentation (legal foundations, application forms) relating to the opening of an account in the National Emissions Trading Registry of Liechtenstein are available from the following page:
The National Emissions Trading Register of Liechtenstein
To open an account in the Emissions Trading Register, every user must submit a correctly completed and signed application form (including all required documents) to the Office of Environmental Protection (by mail). Supplemental transmission by e-mail is requested. Mailing address and e-mail:
Office of Environmental Protection
P.O. Box 684
9490 Vaduz
Liechtenstein
E-mail: register@aus.llv.li
Upon detailed review of the contact data, the applicant receives a personal login name and password by registered mail. The login and password are necessary to access the protected area of the registry.
How and when are emission entitlements issued to the operator accounts?
Pursuant to article 14, paragraph 3 of the Emissions Trading Act (ETA), the registry administrator issues emission allowances to the accounts of installation operators by 28 February of each year at the latest.
What are transactions?
A transaction is any national or international transfer of emission rights between two communicating accounts. This includes the return and cancellation of emission rights.
How and when must the emission entitlements be validated for fulfillment?
By 30 April of the following year (article 15, paragraph 1 ETA), an installation operator must submit emission rights (emission allowances and max. 8% emission credits) in the amount of the emissions recorded and verified in the emission report to the Office of Environmental Protection.
How secure are transactions in the Emissions Trading Registry?
The software application SERINGAS used for the registry employs the SSL (Secure Socket Layer) security protocol. SSL guarantees that you are actually connected with the server of the National Registry and provides secure and confidential data transfer using a 128-bit code.
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