International emissions trading will start with the beginning of the first commitment period under the Kyoto Protocol on 1 January 2008. International emissions trading is one of the three Kyoto flexible mechanisms to reduce greenhouse gases, which aim at helping Parties to the Kyoto Protocol, i.d. countries, to achieve their commitments. From 2008, countries will thus be able for the first time to trade emissions with each other. Every country or every supranational organisation such as the EU can decide whether it wants to give companies in its jurisdiction the opportunity to participate in emissions trading. The EU has done so with its Emissions Trading Scheme (EU ETS), which covers operators of energy-intensive installations in the sectors industry and power-generation.
The pilot phase of the EU Emissions Trading Scheme (EU ETS) from 2005 to 2007 helped gain first experience with emissions trading in Europe and prepare Europe for international emissions trading starting from 2008. For the pilot phase of the EU ETS special allowances, so-called EU Allowances (EUAs) have been issued.
The second phase of the EU ETS from 2008-2012 coincides with the first commitment period under the Kyoto-Protocol. For this period Austria will receive its so-called Assigned Amount (AA), which is calculated on the basis of its greenhouse gas emissions in 1990 (for hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride the base year 1995 was chosen) and its reduction target (minus 13 %). The tradable units of the assigned amount are called Assigned Amount Units (AAU).
The share of the Assigned Amount that is foreseen for the installations that participate in emissions trading is converted into EUAs and allocated to operators on the basis of the National Allocation Plan. AAUs themselves can only be traded by countries or by persons who have been entitled to do so by countries. From 2008 onwards companies, on the other hand, will trade with EUAs that have been converted from AAUs. In addition, operators have the opportunity to acquire Kyoto units from international JI and CDM projects and use them for their compliance.