FAQ

The basic principles of emissions trading go back to an economic theorem by Ronald Coase (Coase theorem). This assumes that participants in a market can manage external costs if they can negotiate the allocation of resources and exchange them without incurring costs.

From this, economist J.H. Dales developed the basic idea of emissions trading by proposing to establish a market for pollution rights. This approach enabled policymakers to set a concrete upper limit on pollution for the first time. In emissions trading, pollution rights correspond to emissions allowances, with one allowance entitling the holder to emit 1 ton of CO2 equivalent. The price of the certificate is determined by the market.

Liechtenstein allocates allowances to plant operators covered by the Emissions Trading Directive, the quantities of which are significantly lower than the actual planned emissions (reduction target). Operators are free to implement reduction measures themselves, or to purchase the missing emission allowances on the market. Emission reduction measures are consequently carried out where they can be implemented most cost-effectively. Emissions trading creates incentives for investments in CO2-saving technologies and thus gives companies more flexibility to achieve their targets. Overall, the costs for all companies involved in the system are reduced

In addition, a new market is created for traders of emission allowances, experts and other service providers.

Under the Kyoto Protocol and the Emissions Trading Directive, 8 different so-called emission rights can be distinguished. They are characterized by their origin, their chargeability to the reduction target and their transferability to subsequent commitment periods. Emission allowances are so-called EU Allowances (EUAs), which are allocated to plant operators by the state. Certificates from projects in developing countries (CDM) or from other industrialized countries (JI) are referred to as emission credits. The table below provides an overview of which emission allowances may be used in which system. All emission allowances are freely tradable in all systems.

Table 1: Detailed information on emission allowances; modified according to the Federal Office for the Environment (FOEN).

Definitions of emission allowances

EUA : EU Allowances - emission allowances allocated to companies covered by Annex 1 of the Emissions Trading Directive. The allocation of emission allowances to individual companies is made through the Union Registry of the respective EU/EEA Member State.

AAU : Assigned Amount Units - emission allowances allocated to individual states by the Kyoto Protocol for a commitment period. The allocated amount of AAUs is based on the emissions target that the states must meet in the corresponding commitment period. In the Swiss system - analogous to the EU ETS - AAUs are allocated to Liechtenstein companies with reduction obligations under the CO2 Act.

RMU : Removal Units - emission allowances that can be generated in addition to AAUs as a result of an increase in national sink performance. Since sinks do not contribute to permanent CO2 reduction, RMUs are devalued at the end of the commitment period.

ERU : Emission Reduction Units - emission credits generated from the realization of Joint Implementation (JI) projects between two industrialized countries.

CER : Certified Emission Reductions - emission credits generated from the realization of CDM projects by industrialized countries in developing countries.

tCER : Temporary CER - is an emission credit issued for a CDM project in the context of an afforestation or reforestation project. tCERs expire at the end of each subsequent commitment period and may be renewed as long as the sequestration of CO2 stored in forests can be verified by means of defined procedures.

lCER : Long-term CER is a carbon credit that is issued for a CDM project under a CDM afforestation or reforestation project. lCERs expire at the end of the entire project period and therefore cannot be renewed. However, they must be replaced with other carbon credits if proof of carbon sequestration is not provided every five years.

Any natural and legal person is entitled to apply for an account in the Union Registry in one of the Member States. The opening takes place when all the requirements of the EU and the Member State are met.

All information and documents (legal basis, application form) for opening an account in the Liechtenstein Union Registry can be found on our homepage. The Liechtenstein Union Registry can be found at www.emissionshandelsregister.li

Each applicant for the opening of an account in the Liechtenstein Union Registry, must submit a correctly completed application form (including all required documents) to the Office for the Environment electronically.

After a thorough review of all data and documents, the applicant and all account representatives will receive their personal activation key by registered mail. This key is necessary to access the secure area of the Union Registry.

According to Article 16, Paragraph 3 of the Emissions Trading Act, a 3rd account representative with permanent residence in Liechtenstein is mandatory for opening an account in the Liechtenstein Union Registry. Possible candidates can be found at:

According to Art. 14 para. 3 of the Emission Trading Act (EHG), the allocation of emission allowances to the accounts of the plant operators is carried out by the registry administrator by February 28 of a corresponding year at the latest.

A transaction is any national or international transfer of emission allowances between two communicating accounts. This includes the return and cancellation of emission rights.

By April 30 of the following year (Art. 15 para. 1 EHG), an installation operator must submit emission rights (emission certificates and max. 8% emission credits) in the amount of the verified emissions shown in the emission report to the Office for the Environment.

The Liechtenstein Union Registry complies with EU and UN security requirements and offers 6 levels of security. You can find more about this in our security policy on this website under Menu Union Registry. Of course, the Union Registry also has the security protocol SSL (Secure Socket Layer). SSL guarantees on the one hand that you are actually connected to the server of the Union Registry and on the other hand enables a secure and confidential data transfer via a 128-bit code.