
Article 1 
This Decision lays down provisions for the implementation of Article 11b(3) and (4) of Directive 2003/87/EC.
Article 2 
For the purposes of this Decision, and in addition to the definitions laid down in Article 2 of Commission Regulation (EC) No 2216/2004, the following definitions shall apply:

1.. ‘direct emission reduction or limitation’ means a reduction or limitation of emissions occurring due to a project activity which causes reductions or limitations of emissions in installations that are individually identified in the project activity’s baseline established pursuant to Article 1 of Appendix B to Decision 16/CP.7 of the United Nations Framework Conference on Climate Change (UNFCCC), or pursuant to Article 44 of the Annex to Decision 17/CP.7 of the UNFCCC;
2.. ‘indirect emission reduction or limitation’ means any reductions or limitations of emissions in installations falling under the scope of Directive 2003/87/EC that is not a direct emission reduction or limitation;
3.. ‘trading sector project-reduction’ means a reduction or limitation in emissions of installations falling under the scope of Directive 2003/87/EC due to project activities for which a Member State hosting the project activity issues emission reduction units (ERUs) or certified emission reductions CERs;
4.. ‘letter of approval’ means, in the case of project activities that generate ERUs, a binding obligation undertaken in a written form by the Member State hosting the project activity to issue ERUs in accordance with the Member State’s national guidelines and procedures for approving project activities as referred to in Article 20 (a) of the Annex to Decision 16/CP.7 of the UNFCCC; and in the case of project activities that generate CERs, a written approval of voluntary participation from the designated national authority of the Member State hosting the project activity as referred to in Article 40(a) of the Annex to Decision 17/CP.7 of the UNFCCC;
5.. ‘letter of endorsement’ means an official communication in a written form by the Member State to host the project activity that it considers the project as one with a potential to gain eventual approval as a project activity.
Article 3 

1. In its national allocation plan for the period 2008 to 2012, a Member State shall include in the total quantity of allowances a set-aside of allowances drawn up for each project activity in the format set out in the table in Annex I to this Decision if, prior to the deadline for the notification of its national allocation plan set out in Article 9(1) of Directive 2003/87/EC, the Member State has issued letters of approval as a host country, pledging to issue ERUs or CERs for project activities which result in emission reductions or limitations in installations falling under the scope of Directive 2003/87/EC.
2. In its national allocation plan for the period 2008 to 2012, a Member State may also include in the total quantity of allowances an additional set-aside of allowances drawn up in the format set out in the Annex II to this Decision if after the decision pursuant to Article 11(2) of Directive 2003/87/EC it intends to issue letters of approval as a host country that pledge to issue ERUs or CERs before 31 December 2012 for project activities which result in emission reductions or limitations in installations falling under the scope of Directive 2003/87/EC. Planned project activities using the same methodology to reduce emissions for which no letter of endorsement has been issued yet may be grouped together under one column in the set-aside table drawn up according to Annex II.
3. Until a decision pursuant to Article 11(2) of Directive 2003/87/EC has been taken by the Member State, but at the latest until the deadline for that decision in Article 11(2) of Directive 2003/87/EC, further allowances may be transferred from the set-aside established pursuant to Article 3(2) to the set-aside established pursuant to Article 3(1) that cover the trading sector project-reductions of projects for which the letter of approval has been issued after the deadline for the notification of its national allocation plan set out in Article 9(1) of Directive 2003/87/EC.
Article 4 
The set-aside table shall be made available on the publicly accessible website of a Member State's registry.
Article 5 

1. ERUs and CERs that represent trading sector project-reductions may be issued up until 31 December 2012, provided that each such issuance is preceded by the conversion of an equivalent amount of allowances from one of the set-asides into assigned amount units and the Commission is informed thereof.
2. The quantity of allowances in the set-aside established pursuant to Article 3(1) that that is not converted into assigned amount units in accordance with Article 5(1) until 31 December 2012 may be sold as 2008-2012 period allowances. If the project activity causes direct emission reductions and limitations, this quantity may be issued as 2008-2012 period allowances to the installations identified in rows VII/a-VII/b of the table in Annex I.
3. Any allowances in the set-aside established pursuant to Article 3(2) that that are not converted into assigned amount units in accordance with Article 5(1) until 31 December 2012 shall be cancelled.
Article 6 

1. A Member State wishing to approve project activities as a host country after the deadline for the submission of the national allocation plan shall inform the Commission thereof, prior to the issuance of the letter of approval. This information shall be accompanied by a report of an independent verifier which verifies that any ERUs or CERs to be issued do not result in double counting, in doing so providing all necessary information ensuring that the project activities submitted for approval are in compliance with Article 11b of Directive 2003/87/EC.
2. Letters of approval issued in accordance with Article 3(2) and letters of endorsement issued after the deadline for the notification of the national allocation plan set out in Article 9(1) of Directive 2003/87/EC for project activities that will result in trading sector project-reductions shall assign the allowances that are to be converted into assigned amount units from the set-aside established pursuant to Article 3(2) in the event of the issuance of ERUs or CERs. If an allowance was already assigned by a letter of approval to a particular project activity for future conversion, it cannot be reassigned to another project afterwards.
Article 7 
This Decision is addressed to the Member States.
Done at Brussels, 13 November 2006.
For the Commission
Stavros DIMAS
Member of the Commission
ANNEX I

 Project activityX Project activityY … Total quantity of allowances in set-aside
I/a Title of project activity    
I/b Project identification code of project activity    
I/c Date of letter of approval for the project activity    
II Total quantity of GHG to be reduced or limited(in tons for 2008-2012)   
III % of total reductions that the government issues as ERUs or CERs   
IV Description of baseline   
V % of emissions of installations covered by Directive 2003/87/EC in the total emissions included in the baseline (in case of indirect reductions or limitations, an estimate is to be provided)   
VI Planned trading sector project-reduction quantity (II*III*V)    (Σ VI) = (Σ VIII/a-VIII/e)
VII/a For direct reductions and limitations, the name of the installation where the trading sector project-reduction will occur    
VII/b For direct reductions and limitations, the installation ID of the installation where the trading sector project-reduction will occur   
VIII/a Quantity of ERUs or CERs that represent trading sector project-reductions issued for 2008   
VIII/b Quantity of ERUs or CERs that represent trading sector project-reductions issued for 2009   
VIII/c Quantity of ERUs or CERs that represent trading sector project-reductions issued for 2010   
VIII/d Quantity of ERUs or CERs that represent trading sector project-reductions issued for 2011   
VIII/e Quantity of ERUs or CERs that represent trading sector project-reductions issued for 2012   





ANNEX II

 Planned project activityX Planned project activityY … Total quantity of allowances in set-aside
I/a Title of planned project activity    
I/b Project identification code of planned project activity    
I/c Date or projected date of letter of endorsement for the planned project activity    
I/d Projected date of letter of approval for the planned project activity    
II Planned total quantity of GHG to be reduced or limited (in tons for 2008-2012) by the planned project activity   
III % of total reductions that the government issues as ERUs or CERs for the planned project activity   
IV Description of baseline   
V Estimate of the % of emissions of installations covered by Directive 2003/87/EC within the total emissions included in the baseline   
VI Planned trading sector project-reduction quantity (II*III*V)    (Σ VI)
VII/a For direct reductions and limitations, the name of the installation(s) where the planned trading sector project-reduction is to occur    
VII/b For direct reductions and limitations, the installation ID of the installation(s) where the planned trading sector project-reduction is to occur   
VII/c For indirect reductions and limitations, the activity category where the planned trading sector project-reduction is to occur   
VIII The quantity of allowances deducted from the allocation of the installations/activity category indicated under rows VII/a-VII/c to fill the set-aside    





