The European Union and United Nations each have carbon registries, which track and log the carbon offset projects which provide the basis for carbon credits.
The EU Emissions Trading Scheme uses the Community Independent Transaction Log (CITL) tracks European Union Allowances (EUAs) for all 27 EU countries. UN’s International Transaction Log (ITL) tracks the trade and transfer of all Kyoto Protocol units such as Emission Reduction Units (ERUs) that include Certified Emission Reductions (CERs).
Until the linkage went live on October 16, 2008 only a handful of countries were connected to both registries. Without a link to the ITL, the UN registry could not record trades within the EU ETS, as intended.
With a linkage between the EU and UN programs, EU ETS participants can import UN program offsets such as CERs. Most of these offsets are generated by countries such as China and India.
The linkage also means those forward contracts can be physically settled.