L 33818 Official Journal of the European Union 13.11.2004 DIRECTIVE 2004/ 101/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 October 2004 amending Directive 2003/87 [EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol’s project mechanisms (Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO- PEAN UNION, Having regard to the Treaty establishing the European Commu- nity, and in particular Article 175(1) thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Economic and Social Committee (1), After consulting the Committee of the Regions, Acting in accordance with the procedure laid down in Article 251 of the Treaty (?), Whereas: Directive 2003/87/EC (?) establishes a scheme for green- house gas emission allowance trading within the Commu- nity (the Community scheme) in order to promote reduc- tions of greenhouse gas emissions in a cost-effective and economically efficient manner, recognising that, in the longer-term, global emissions of greenhouse gases will need to be reduced by approximately 70 % compared to 1990 levels. It aims at contributing towards fulfilling the commitments of the Community and its Member States to reduce anthropogenic greenhouse gas emissions under the Kyoto Protocol which was approved by Council Decision 2002/358/EC of 25 April 2002 concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Conven- tion on Climate Change and the joint fulfilment of com- mitments thereunder (4). (1) OJ C 80, 30.3.2004, p. 61. (%) Opinion of the European Parliament of 20 April 2004 (not yet pub- lished in the Official Journal) and Council Decision of 13 September 2004 (not yet published in the Official Journal). () OJ L 275,25.10.2003, p. 32. (4 OJL 130, 15.5.2002, p. 1. ) Directive 2003/87 [EC states that the recognition of credits from project-based mechanisms for fulfilling obligations as from 2005 will increase the cost-effectiveness of achieving reductions of global greenhouse gas emissions and shall be provided for by provisions for linking the Kyoto project- based mechanisms, including joint implementation (JI) and the clean development mechanism (CDM), with the Com- munity scheme. Linking the Kyoto project-based mechanisms to the Com- munity scheme, while safeguarding the latter’s environ- mental integrity, gives the opportunity to use emission credits generated through project activities eligible pursu- ant to Articles 6 and 12 of the Kyoto Protocol in order to fulfil Member States’ obligations in accordance with Article 12(3) of Directive 2003/87/EC. As a result, this will increase the diversity of low-cost compliance options within the Community scheme leading to a reduction of the overall costs of compliance with the Kyoto Protocol while improving the liquidity of the Community market in greenhouse gas emission allowances. By stimulating demand for JI credits, Community companies will invest in the development and transfer of advanced environmentally sound technologies and know-how. The demand for CDM credits will also be stimulated and thus developing coun- tries hosting CDM projects will be assisted in achieving their sustainable development goals. In addition to the use of the Kyoto project-based mecha- nisms by the Community and its Member States, and by companies and individuals outside the Community scheme, those mechanisms should be linked to the Com- munity scheme in such a way as to ensure consistency with the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol and subsequent decisions adopted thereunder as well as with the objectives and architecture of the Community scheme and provisions laid down by Directive 2003/87EC. Member States may allow operators to use, in the Commu- nity scheme, certified emission reductions (CERs) from 2005 and emission reduction units (ERUs) from 2008. The use of CERs and ERUs by operators from 2008 may be allowed up to a percentage of the allocation to