The Cabinet of Ministers of Ukraine has recently adopted a procedure regarding the application for and transfer of emissions reductions units generated after 2012 through Joint Implementation (JI) projects under Article 6 of the Kyoto Protocol. The procedure has not been published yet and will enter into force upon publication.

Pursuant to the procedure, the National Environmental Investments Agency of Ukraine (NEIA) may transfer assigned amount units (AAUs) to an investor of a JI project in the amount of:

(1) 75 % of the anticipated post-2012 emissions reductions, if at the time of application, at least one verification report as to the reductions already achieved will be available; or

(2) 50% of such anticipated post-2012 reductions, if no actual reductions have been achieved at the time of the application, but will be achieved before 1 January 2013, that will be certified by the verification report to be submitted not later than 15 July 2013.

To be eligible, a JI project has to obtain an International Transaction Log identification number and have a respective determination report for the post-2012 reductions issued by an international or national accredited independent entity. The procedure does not differentiate between Track 1 and Track 2 in terms of the project registration.

AAUs will be transferred upon the request of the owner of the object, who has entered into an agreement with NEIA "on the provision of state support" and a respective resolution of the Cabinet of Ministers, the draft of which is to be prepared by NEIA in each case.

The procedure is expected to provide more security to JI project investors, since the decision of NEIA will be based on the documents relating to a particular investor (submitted in addition to the project documents):

(a) a respective investment agreement;

(b) information about the investor;

(c) a plan for investments disbursements.

Upon the conclusion of the agreement with NEIA, the owner of the object will have obligations before NEIA to comply with the provisions of the submitted documents. Failure to fulfil any of its obligations under such agreement will result in an obligation to pay to the State the damages equal to the amount of investments received under the project.

Law: Regulation of the Cabinet of Ministers of Ukraine No. 1313 of 25 November 2009 adopting the ¨Procedure of provision of the state support to the owners of the objects implementing projects aimed at reduction of anthropogenic GHG emissions in accordance with Article 6 of the Kyoto Protocol to the UNFCCC¨.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 14/12/2009.