Ukraine has failed to comply under the Kyoto Protocol’s first commitment period (CP1), even though the country held a sufficient number of carbon units in its UN registry account, UN data showed late on Tuesday.

It was the only one of Kyoto’s 36 Annex I countries – developed countries that agreed to take on emissions targets under the 1997 treaty – to have not retired enough Assigned Amount Units (AAUs) during the Protocol’s True-up period to cover its cumulative national GHG output in CP1 (2008-2012).

Ukraine, which has been ravaged by civil war in the past couple years, emitted 2 billion tonnes of CO2e during CP1, and was required under Kyoto to transfer an equivalent number of UN-issued carbon units into its Retirement account at the registry before the 2400 UTC Nov. 18 deadline.

According to the UN data, Ukraine was sitting on double that amount – some 4 billion AAUs – in its Holding account as of Tuesday evening, meaning it simply had to transfer half of its inventory over to its Retirement account in order to comply.

It was not clear whether an exception would be made for the country in light of its current circumstances, with a UN spokesman saying only: “the final accounting for the first commitment period under the Protocol will be reviewed by independent experts in the first half of 2016.  The results of that review will feed into the determination of whether and how Parties complied with their targets.”

Failure to comply can result in repercussions ranging from a review by Kyoto’s Compliance Committee to the suspension of carbon-unit trading under the treaty. In 2011, Ukraine was banned from trading Kyoto carbon credits for several months due to irregularities in its emissions reporting.

In severe non-compliance cases, the AAU shortfall is to be inflated by 30%, and then that figure is to be deducted from a country’s AAU balance during the Protocol’s second commitment period (2013-2020).

Iceland also did not hold enough AAUs in its Retirement account to cover its CP1 emissions, but the government last month told Carbon Pulse that the 3.3 million-unit shortfall would be covered by the application of a provision from the UN’s 2001 Marrakesh Accords that exempts emissions from large industrial plants built in small countries since 1990 that utilise renewable energy.

LEFTOVERS

Tuesday’s updated data showed that compared to their cumulative emissions, the 36 Annex I countries were sitting on an AAU surplus of more than 13 billion units, with Russia along holding some 5.8 billion.

The leftover emissions rights are likely to be used by the countries that remain in Kyoto to help meet their obligations under the treaty’s second commitment period (CP2), which runs from 2013 to 2020.

AAUs have been dubbed “hot air” by some green groups because most did not come about as the result of climate policy, but rather were inadvertently generated by the collapse of the Soviet Union.

The units have emerged as a divisive issue at UN talks, with western nations seeking their cancellation and eastern countries arguing that the credits’ method of creation was irrelevant compared to the fact that they represent genuine reductions.

Eventually, negotiators at the 2012 UN climate summit in Doha agreed to allow nations holding surplus AAUs from CP1 to carry them forward to CP2. However, strict limits were imposed on buyers, allowing them to only procure AAUs up to a maximum of 2.5% of their own CP2 allocations.

In addition, Australia, the EU, Japan, New Zealand, Switzerland and Norway made a political declaration vowing that they would not buy any.

CANCELLATIONS

Tuesday’s updated UN data also showed that Annex I countries had cancelled some 835.2 million AAUs, an increase of 133.8 million compared to the last update on Oct. 28.

Amongst the largest cancellers were the EU (376.4 million), Australia (231.4 million), and Russia (99.8 million).

Cancelled units cannot be counted against a country’s emissions. Governments must cancel an AAU for every EU Allowance or Kyoto project-based credit (CER or ERU) that is used to voluntarily offset an organisation’s or individual’s emissions.

Annex I countries must also cancel AAUs to account for deforestation that has occurred since 1990, Kyoto’s base year, as the trees in question are no longer able to absorb CO2.

By Mike Szabo – mike@carbon-pulse.com