This note is designed to provide an insight into Directive 2003/87/EC of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC.1 Since 1992, when the United Nations Framework Convention on Climate Change (UNFCCC) was adopted, greenhouse gas emissions and their possible adverse effect on the global climate system have become an environmental issue of
international concern. The UNFCCC was followed by intense negotiations over two and a half years, which finally, in 1997, led to the adoption of the Kyoto Protocol to the United Nations Framework Convention on Climate Change (Kyoto Protocol), once the parties had concluded that the Convention’s commitments were not sufficient to tackle climate change in a serious way.
The main objective of the Kyoto Protocol is to limit the emission of greenhouse gases2 and, unlike the UNFCCC, it established legally binding greenhouse gas emissions targets under Article 3 for those countries listed in Annex I. These countries must cut emissions to at least 5 per cent below 1990 levels by 2008–2012.3 In addition to these legally binding targets the Kyoto Protocol also introduced three international flexibility mechanisms, namely: international emissions trading, joint implementation and the clean development mechanisms. To achieve the Protocol’s targets the parties need to implement national climate change policies and measures. To this end, Article 2 of the Kyoto Protocol gives an indicative list of policies and measures, which might help to mitigate climate change and promote sustainable