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The Kyoto Protocol

This is the first step towards stabilising the climate. Its objective is to impose a reduction of 5.2 % in greenhouses gases emissions by 2010 in the industrial counties that have ratified it, compared with the level in 1990. To reach this objective, industrialised countries are authorised to emit a reduced quantity of greenhouse gases ("QA") over the period 2008-2012.

Two mechanisms should facilitate the respect of these objectives:

• the QA may be exchanged between States
• a State may finance a project to reduce carbon emissions in another State, and obtain emission credits in return (“CER” or “ERU”)

According to the Kyoto Protocol, the European Union and its Member States must reach a level of reduction of 8 % (by 2010, compared with the level in 1990). To achieve this objective, the Union States have imposed restrictions on carbon emissions on more than 10,000 companies active in five sectors:

• energy
• the production and transformation of ferrous metals
• the cement industry
• he glass and ceramics industry
• the manufacturing of paper and cardboard pulp

These industries are responsible for approximately 50 % of carbon emissions in the European Union.

Each of these industries was allocated an emission quota that they can exchange. However, there is a ceiling that must be respected. To respect their obligations, these companies may:

• reduce their emissions at the source, through industrial means
• acquire quotas on the market
• acquire emission credits (“CER” or “ERU”) from certified emission reduction projects

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Carbon markets

Compulsory market in full expansion

The emission quotas and emission credits are exchanged on a world market. Companies that do not reach their objectives may acquire such quotas or credits in order to bring themselves into line; on the other hand, companies that have taken effective measures to limit their emissions can negotiate their quotas on the market.

In 2004, 100 million tons of carbon were exchanged on the quotas market. In 2005, this quantity more than tripled. In 2006, it even reached a billion tons.

This year, the emission credits (“CER” and “ERU”) represented a market of more than 500 million tons of carbon.

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Voluntary market in full expansion

The situation is such, and the extent and deadline of the climatic objectives are so urgent, that the “carbon restriction” is intensifying: it already concerns companies that belong to the industrial sectors that pollute the most, and it has been extended to other industrial sectors. In the end, it will also concern private individuals.

A new market is being set up, aimed at encouraging the voluntary limitation of CO₂ emissions. There is still no constraint obliging citizens to limit their emissions. However, an increasing number of men and women, conscious of the dangers of global warming, and conscious of the impact of their lifestyle on the climate, are voluntarily endeavouring to limit their daily carbon emissions. In order to support and encourage this trend, we have launched CLIMACT, offering credible services based on solid expertise.

In the future, the constraints imposed on heavy industries will be extended to SME, and to private individuals. Consequently, citizens that have already taken action and have voluntarily made an effort to reduce their greenhouse gas emissions will have taken the lead by integrating this constraint and will suffer less from its severity.

In order to remain viable, the voluntary market, whose volume has doubled annually since 2001, must propose credible services. Gradually, according to the generalisation of compulsory measures to limit emissions (emission ceilings, carbon tax, etc.), the distinction between the voluntary market and the compulsory market will fade.

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