EU-U.N. carbon trade to link by April '09

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The link will help European companies buy cheap carbon offsets from developing countries and former communist nations, helping to cut the cost of meeting greenhouse gas emissions limits set under the emissions trading scheme (ETS).

BRUSSELS (Reuters) - The European Union's emissions trading scheme may not link with a U.N.-run Kyoto Protocol scheme for several months but the tie-up will be completed by April 2009 at the latest, the European Commission said on Wednesday.

The link will help European companies buy cheap carbon offsets from developing countries and former communist nations, helping to cut the cost of meeting greenhouse gas emissions limits set under the emissions trading scheme (ETS).

The ETS is the EU's main instrument to combat global warming. It sets limits on the amount of carbon dioxide -- the main greenhouse gas -- that companies may emit and allows them to trade permits, based on whether they overshoot or undershoot those limits.

April 2009 is the deadline for companies to hand in enough emissions permits to cover all of their 2008 emissions.

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The U.N. connection had been expected in 2007, and a delay beyond December 2008 may complicate contracts to settle carbon offset purchases by that date.

The Commission said it was preparing a link for 25 of the 27 EU nations. Malta and Cyprus were not included.

Carbon offsets from developing countries are called certified emissions reductions (CERs), and from former communist countries emission reduction units (ERUs).

"The Commission will ensure that it will be possible to deliver CERs and ERUs into EU registries by April 2009 at the latest, the period when these credits can be used for surrender in the EU ETS," the Commission said in a statement.

"In order to make sure that the testing is carried out with the maximum thoroughness, the Commission will not announce a date for the connection of the ITL and the CITL until all the testing is completed," it said, referring to technical tests of U.N. and EU carbon trading software, respectively.

(Reporting by Jeff Mason; writing by Gerard Wynn; editing by

Dale Hudson)