Carbon credits are created by emissions controls and by other manufacturing practices and they can be sold to other facilities to offset emissions that cannot be economically reduced. These are attractive when a facility cannot meet a new regulation, and is near the end of its useful life, making it uneconomic to install expensive new emissions controls. Carbon credits can also be held or eliminated to reduce available credits. This results in a loss of potential value to those who created them, but is good for the environment since this reduces total Carbon emissions. The EU is proposing to temporarily curb an oversupply in Carbon credits.

Secretary-General Ban Ki-moon welcomed the move by the European Parliament to support the proposal to backload permits from the European Union’s carbon market.

“The vote sends a clear signal that the European Union remains committed to carbon pricing,” the Secretary-General’s spokesperson said in a statement.