Kyoto Protocol commitments and units post-2020

Legal assistance paper

All reasonable efforts have been made to ensure the accuracy of this information at the time the advice was produced (please refer to the date produced below). However, the materials have been prepared for informational purposes only and may have been superseded by more recent developments. They do not constitute formal legal advice or create a lawyer-client relationship. You should seek legal advice to take account of your own interests. To the extent permitted any liability is excluded. Those consulting the database may wish to contact LRI for clarifications and an updated analysis.

Date produced: 08/02/2021

1. What are the implications of the entry into force of the Doha Amendment for countries that are Parties to the Kyoto Protocol and the Paris Agreement, and have a mitigation commitment under both?

2. Can you clarify if and to what extent NDCs under the Paris Agreement will supersede Parties\’ emission reduction targets at the end of the second commitment period?

3. What does this potentially means for a transition from one regime to another?


Following the entry into force of the Doha Amendment, Annex B (developed country) parties that have individual legally binding commitments will have to demonstrate their achievement for the commitment period of 2013-2020. This will be done according to the measuring, reporting and verification rules of the Kyoto Protocol and decisions of the CMP and a process that should terminate by 2023.

The non-binding mitigation commitments contained in NDCs under the Paris Agreement do not formally supersede the legally binding mitigation commitments under the Doha Amendment. However, in the absence of a new (post-2020) commitment period under the Kyoto Protocol, NDCs and the related process for accounting will be the main means for setting individual emissions reduction goals which all states, including those that had binding commitments under the Doha Amendment, are expected to achieve and use as basis for increasing their ambition in future NDCs.

There are two possible linkages between post-2020 NDCs and the Kyoto Protocol. These relate to the use and existence of ‘Kyoto units’ on the one hand, and the process for the accounting for implementation of NDCs under the Paris Agreement on the other:

  • First, carried-over (surplus) Assigned Amount Units (AAUs) could be used by KP Annex B states in the following cases: a) by means of accounting emissions to demonstrate the implementation of an NDC; and b) under future voluntary Internationally Transferred Mitigation Outcomes (ITMOs), whose ‘transferred outcomes’ might include surplus AAUs, that could be used to prove the implementation of a country’s NDC.
  • Second, it might be possible for credits from the Kyoto Protocol’s Clean Development Mechanism (CDM) to be ‘transferred’ under the new Article 6.2 Internationally Transferred Mitigation Outcomes (ITMOs) or Article 6.4 market-based mechanism of the Paris Agreement. The last CMA at COP25 failed to reach a decision on the matter, but should a ‘CDM transition’ be agreed upon, CDM credits should be eligible for proving the achievement of a country’s NDC.


1. Entry into force of the Doha Amendment

The Doha Amendment to the Kyoto Protocol (KP), which established the second commitment period of the KP (2013-2020), entered into force on 31 December 2020. On the same date, the second commitment period expired. Formally, it means that the mitigation commitments [quantified emission limitations and reductions commitments (QELRCs)] taken on by Annex B states under the Amendment became legally binding on 31 December 2020. In addition those states will have to comply with all the rules of the amended treaty. Since they have largely complied with their QELRCS, in practice the main obligations are those related to the accounting process for measuring, reporting and verifying their compliance with their mitigation commitments in the second commitment period.

Annex B states have already been complying with certain reporting requirements under the second commitment period, including the reporting of the KP units[1] held and transferred in their national accounts. With the ending of the second commitment period (at the end of last year), the same states will have to undergo the final process of communication and verification of their GHGs emissions for the second commitment period.[2] This ‘True-Up Period’ (TUP) allows Annex B states to make the necessary international transfers of ‘Kyoto units’, so that they can prove their compliance with their own QLERCs. In other words, by the end of the TUP, these states must hold in their accounts as many Kyoto units as their verified GHGs emissions for the second commitment period.[3] The TUP for the second commitment period should last until 2023.[4] The consequences for non-compliance can lead to an initiation of cases before the Kyoto Protocol compliance mechanism, with the possible adoption of corrections or sanctions (of a minor nature).[5]

2. Relationship between NDCs and Kyoto commitments

The Paris Agreement (PA) and the Kyoto Protocol (as amended) are two separate treaties under international law with a different state-party composition, both adopted ‘under’ the UN Framework Convention on Climate Change (UNFCCC). Both instruments supplement the Convention. There is no provision in the PA (or COP decision adopting it) indicating that it was meant to supersede the KP, and the provisions of both agreements do not conflict with each other to an extent that would make it impossible to apply both instruments at the same time. Formally, the ‘pre-2020 (I)NDCs’ have been existing in parallel to the QELRCs under the Doha Amendment.

Moreover, the ‘post-2020’ NDCs will not supersede (i.e. substitute) the legally binding QLERCs of the second commitment period, as the Paris Agreement makes no direct reference to those or to the Kyoto Protocol. Thus, an Annex B state with a QELRC under the Doha Amendment will be bound to demonstrate its compliance with it during the TUP and, at the same time, it will have to communicate and account for the implementation of its NDC according to the rules and process of the Paris Agreement.[6]

Looking forward, however, in the absence of a new (post-2020) commitment period under the KP, NDCs – and the related process to account for their achievement and implementation – will be the only international instruments expressing specific GHGs emissions targets which states have committed to achieve. The KP will, however, continue to formally exist until such a time as the parties to it decide that it is formally terminated. Similarly, the mechanisms existing thereunder will continue to legally exist until parties decide otherwise.

There are potentially two indirect linkages between Kyoto Protocol’s QELRCs and the NDCs under the Paris Agreement. These relate to the use and existence of ‘Kyoto units’ on the one hand, and the process for the accounting for implementation of NDCs under the Paris Agreement on the other.

  • First, Assigned Amount Units (AAUs) under the Kyoto Protocol, that have been ‘banked’ by Annex B states during the first (and now, possibly, the second) commitment period under the Kyoto Protocol, could potentially be used by the same states to account for the achievement and implementation of their NDCs. The suggestion has been made by the Australian government; whilst the prospects for this to be agreed by all states appear unlikely, we set out below the arguments put forward in its support.
  • Second, it might be possible for credits from the Kyoto Protocol’s Clean Development Mechanism (CDM) to be ‘transferred’ under the new Article 6.2 Internationally Transferred Mitigation Outcomes (ITMOs) or Article 6.4 market-based mechanism of the Paris Agreement. The last CMA at COP25 failed to reach a decision on the matter, but should a ‘CDM transition’ be agreed upon, CDM credits should be eligible for proving the achievement of a country’s NDC.

To some extent, this may be addressed in the final set of rules adopted by parties on the implementation of Art.6 of the Paris Agreement. The following section provides a general overview on some of the specific questions that may arise, potential arrangements and other practical interactions between emission units under the Kyoto Protocol and the Paris Agreement:

3. Practical interactions and questions

3.1 Using AAUs under the NDC implementation framework

AAUs are base units of emissions, which Annex B parties to the Kyoto Protocol could use to demonstrate compliance with their assigned emission target during commitment periods (2008-2012 and 2013-2020). Basically, an AAU, like other units of emissions, consists of a measure of accounting to prove compliance against the individual targets under the KP.  They can be transferred between Annex B parties (under the International Emission Trading scheme – KP, Art. 17) and can also be swapped against emission allowances of regional emissions trading schemes, such as the EU Emission Trading Scheme. Thus, AAUs are seen as a commodity or type of \’currency\’ through which parties manage their emission allowances.

As AAUs are a creation of the KP and are not referred to in the PA, the rules on transferability, use and carry-over of AAUs (‘surplus AAUs’) have only legal validity under the treaty law framework of the KP. The question as to whether Annex B state parties can use any such surplus AAUs under the PA’s NDC framework[7] is a matter of interpretation of the PA and related CMA decisions. In this context, the following considerations may help:

The potential use of AAUs is relevant under the emerging accounting modalities and practices, which states are expected to use when accounting for GHG emissions and removals corresponding to their NDCs and reporting on the implementation of NDCs under the PA’s enhanced transparency framework.[8] The most recent CMA decision adopted a Guidance on accounting for GHGs emissions and removals related to NDCs.[9] All state parties are expected to use this Guidance for their accounting of second and subsequent NDCs and may choose to apply it to their first NDC.[10] The Guidance provides that parties account for their emissions according to the IPCC guidelines[11] and in line with the rules on the enhanced transparency framework contained in Decision 18/CMA.1.[12]

With reference to the use of AAUs as accounting units in the Guidance, the following provisions are determinant:

“(b) Parties whose nationally determined contribution cannot be accounted for using methodologies covered by IPCC guidelines provide information on their own methodology used, including for nationally determined contributions pursuant to Article 4, paragraph 6, of the Paris Agreement, if applicable;

(c) Parties that draw on existing methods and guidance established under the Convention and its related legal instruments, as appropriate, provide information on how they have done so.”[13]

Para. (b) above appears to suggest that a state could adopt a different methodology from that used under the 2006 IPCC Guidelines, should there be reasons that practically bar its applicability in the context of an NDC. To use carried-over AAUs for its accounting and reporting, a party may argue that given its current use of KP accounting and reporting, and/or it is drawing “on existing methods and guidance under the Convention and its related legal instrument” (as per para. (c)), in this case the Kyoto Protocol and related accounting guidance.[14] The better interpretation, however, may be that the exceptions only apply to developing countries that are not able to use the IPCC guidelines because of lack of knowledge, capacity or resources. Consequently, it would not apply to (Annex B) parties holding AAUs.

3.2 Using carried-over AAUs as Internationally Transferred Mitigation Outcomes (ITMOs)

Under Art.6.2 and 6.3 of the PA, all states can use ITMOs to achieve their NDCs.[15] ITMOs are voluntary cooperation activities between states which will operate “towards nationally determined contributions”.[16] ITMOs will allow a state to transfer emission reductions achieved within its NDC for the achievement of the NDC target of another state. Being ITMOs market approaches, in exchange of such transfer the receiving state would purchase or offer finance in return for reduced or avoided emissions.[17] So theoretically, two or more Annex B parties of the KP could potentially set up a voluntary ITMO mechanism where AAUs could be recognised as valid units to prove the implementation of their respective NDC targets. The implementation rules on Art.6 will provide further guidance on this.

Parties wishing to oppose the use of AAUs towards NDCs may argue that doing so would create an unfair advantage for developed countries over developing countries, since only developed countries were granted AAUs under the Kyoto Protocol framework. Furthermore, it is arguable that the structure of AAUs creates a systemic incentive not to reduce emissions beyond set targets: as they are structured as an allowance, or a ceiling of permitted emissions, their trade creates a systemic economic incentive not to reduce emissions beyond a certain aggregate level.

The use of surplus AAUs under the framework of accounting and implementing NDCs is problematic, because it allows to bank avoided emissions of the past for future compliance. In terms of its ‘legal implications’, the following points could be offered against such practice:

  • First, the practice could affect the required increased ambition of future NDCs,[18] because it would artificially lower the contingent target of future progress.
  • Consequentially, this could go against the purpose of the enhanced transparency framework, whose scope is to provide “clarity and tracking of progress towards achieving Parties’ [NDCs]…”[19]; and eventually “build mutual trust and confidence for the effective implementation” of the PA.[20]
  • Furthermore, if surplus AAUs are to be used under future ITMOs, this could raise issues of environmental integrity and double accounting,[21] since these units would represent avoided emissions in the past by one country, which would then be used in the future by another country to account for emissions and prove the implementation of its NDC.
  • Finally, the COP has promoted “the voluntary cancellation by Party and non-Party stakeholders, without double counting of units issued under the Kyoto Protocol, including certified emission reductions that are valid for the second commitment period.”[22] Therefore, the practice of using surplus AAUs for NDCs’ implementation would go against the political aspiration already indicated by the COP.

3.3 Using Clean Development Mechanism (CDM) units under the NDC accounting and implementation framework

The future of the CDM, established by Article 12.1 of the Kyoto Protocol, is still uncertain. There is no provision in the Kyoto Protocol terminating the CDM. Theoretically, it could operate indefinitely. However, the CDM is not directly recognised by the PA and therefore its activities cannot be automatically accepted under the new regime. Its future is subject to decisions to be taken by the parties to the KP and PA over the coming year, and thus the question whether the CDM will continue to function is less of a legal and more of a political/policy issue.

The CDM is a baseline-and-credit market-based mechanism under the Kyoto Protocol. It rewards private or public entities investing in carbon mitigation projects in non-Annex I countries by generating Certified Emission Reductions (CERs). These are marketable offset credits, each equivalent to one tonne of CO2, which can be counted towards meeting KP targets, under some national carbon pricing mechanisms,[23] and other voluntary schemes. Non-Annex I host countries are involved in the CDM project cycle by agreeing to their implementation within national sustainable development policies.

As the operation of the KP has virtually stalled, due to the very late entrance into force of the Doha Amendment, the CDM has lost its rationale as a flexible mechanism to prove compliance with emissions targets under that treaty.[24] This does not mean, however, that the CDM cannot function in the absence of a new commitment period under the KP. Indeed, as the KP has no expiry date, its regulatory and institutional framework can still function to support the operation of the CDM, until all parties agree on the termination of such treaty,[25] the CMP decides to suspend or terminate the operation of the CDM, or the CMP and CMA decide to transfer the CDM under the authority and guidance of the CMA.[26]

In the absence of an explicit prohibition or clear requirements for incorporating the CDM under the PA, different scenarios can be envisaged.The CDM will continue alongside the Sustainable Development Mechanism (SDM) established under Art.6.4 and/or there will be a transition away from the CDM, with its activities being migrated to the SDM.[27] Given the current uncertainties, the below options appear to be the main pathways for the continuing CDM style activities under the Paris Agreement:

  • The pathways currently under negotiations for transitioning the CDM and part of its existing registered projects under the two market-based mechanisms of Article 6 of the PA, namely, the Internationally Transferred Mitigation Outcomes (ITMOs, Art. 6.2); and
  • the Sustainable Development Mechanism of Art.6.4 (SDM);
  • by allowing the use of CERs for accounting and implementation of individual NDCs; and
  • by having developing countries hosting CDM projects and generating CERs outside the above frameworks, and outside the sectoral coverage of their NDcs.

a) Transition under Internationally Transferred Mitigation Outcomes Art 6.2

As we have seen, ITMOs are voluntary cooperation activities between states, which will operate “towards nationally determined contributions”.[28] Activities eligible under this mechanism should promote sustainable development, ensure environmental integrity and transparency, and rely on accounting and avoidance of double counting.

The latest draft text for guidance on ITMOs circulated at COP25 does not refer explicitly to any inclusion of CDM activities or to eligibility of CERs transfers among countries.[29] Despite that, in absence of an explicit prohibition, states could voluntarily include in their ITMOs framework the possibility of supporting CDM projects and transferring CERs. This is supported by the margin of discretion given to states on how to account for emissions in their NDCs, as well as for proving their implementation under the Enhanced Transparency Framework of Art 13.[30]

There are, however, two legal issues that might work against such possibility. First, a state transferring CERs generated by CDM projects in its territory will have to make a ‘corresponding adjustment’ to its NDC target reflecting such transfer.[31] Therefore, and differently from the accounting mechanisms of the KP, host countries will lose the possibility of using transferred CERs to account for the implementation of their own NDC. Therefore, there might be less incentive to use them, knowing that CERs generated from projects in their territories will work to prove the implementation of another country’s NDC.

A second legal issue, which might work against the possibility of incorporating the CDM under ITMOs, is the additionality requirement for registering CDM projects: a CDM project must provide emission reductions that are additional to what would otherwise have occurred. This situation would emerge where a CDM project could not be accepted as additional to baseline scenarios, given that it would enter anyway within the NDC strategy of the host country. Currently the additionality baselines under the CDM do not include NDC strategies. Therefore, this impediment might emerge only for future projects and other further regulatory activity of the CDM Executive Board.

b) Transition under the Sustainable Development Mechanism of Art 6.4

The Sustainable Development Mechanism (SDM) of Article 6.4 will work as a baseline-and-credit mechanism, replicating several features of the CDM. It will generate offset credits for emissions reductions from project activities, which will amongst other things promote mitigation; foster sustainable development; and contribute to emissions reductions of the host state. Credits generated from projects will be used by other states to fulfil their own NDCs.[32] In institutional terms, the SDM will likely be centrally managed and regulated by a Supervisory Body under the CMA.

One key difference from the CDM is that the SDM should also aim to ‘deliver an overall mitigation in global emissions’.[33] This could be interpreted to require the cancellation of some credits to ensure an overall mitigation in global emissions, because offsetting does not lead to further overall emission reductions. The eligibility of CDM projects, instead, is based on the avoidance and reduction of emissions within the project boundaries, according to requirements of additionality.

The latest draft text for guidance on Art.6.4 circulated at COP25 contains elements for the transition and recognition of CERs and Joint Implementation’s ERUs under the SDM. These range from full recognition, to partial transition of CERs originated from only certain types of activities or after a cut-off date.[34] Given the similar nature of the SDM and the CDM as baseline-and-credit mechanisms open to private sector participants, their centralised governance, and their rationale to stimulate and prove global mitigation action, the question and options for transitioning the CDM under the SDM are mainly of political/policy nature, rather than legal.[35]

c) Use of CERs for reporting and accounting of NDCs and transparency

Given that ITMOs and SDM-based credits can be used by states towards the accounting and implementation framework of NDCs, transitioning eligible CDM projects and CERs under the mechanisms of Art.6 will also enable states to use CERs for accounting and implementation of their NDCs. In addition, as the PA’s provisions and CMA decisions do not explicitly exclude the possibility for states to use CERs within the same frameworks but outside the mechanisms of Art.6, some may argue for including the accounting of CERs regardless of their eligibility under Art.6 mechanisms.

As we saw earlier in relation to the use of AAUs in accounting for NDCs, under the CMA’s Decision on NDC guidance, parties will account for their emissions according to the IPCC guidelines[36] and in line with the rules on the Enhanced Transparency Framework contained in Decision 18/CMA.1.[37]

With reference to the use of CERs as accounting units in the NDC guidance, regardless of Art.6 mechanisms, the guidance is open to the inclusion of ‘other assumptions and methodological approaches used for understanding NDCs, and, if applicable, estimating corresponding emissions and removals’.[38] This could be interpreted as allowing the inclusion of CERs transferred in national accounts as a methodological approach for estimating emissions under the NDC.

In terms of accounting methodologies, the same arguments as those used in support of the use of AAUs as accounting units could be used in relation to CERs. The provisions of the NDC guidance Decision that allow states to use their own methodology rather than those covered by IPCC guidelines and to draw on existing methodology and guidance under the Convention and its related instruments could allow the inclusion of CERs in accounting for NDCs. Under the Guidelines on the Enhanced Transparency Framework similar provisions can be found for national inventory reports and on the information to track progress on implementation of NDCs.[39]

d) Eligibility of CERs from CDM projects falling outside host countries’ NDCs

As Brescia et al note,[40] there is a contentious prospect for continuing the operation of the CDM: to allow project eligibility under the PA’s accounting and transparency framework in relation to sectors or GHGs which are outside the coverage of the host country’s NDC. Because the PA allows developing countries not to adopt economy-wide emission reductions in the medium term,[41] the same countries could allow the realisation of CDM projects in their territory, with the resulting issuance of CERs. The same CERs could then be accounted by another purchasing country to prove its NDC’s implementation according to the above findings.

Such a prospect, which raises issues of political/policy nature, also appears feasible in the absence of an explicit prohibition.


[1] These are the ‘Kyoto units’ used to account for GHGs emissions under the three ‘flexibility mechanisms’: International Emissions Trading, Clean Development Mechanism, and Joint Implementation. These are three market-based mechanisms which allow Annex B states to meet part of their emissions reduction commitments abroad.

[2] Kyoto Protocol, Articles 7 and 8.

[3] Decision 13/CMP.1, paras 13-14. Formally the units needed to be compliant are ‘retired’ into a specific account.

[4] The exact date will be decided by the CMP.

[5] Decision 27/CMP.1

[6] Paris Agreement, Article 13; and Decision 18/CMA.1. The new modalities for accounting apply only for the first round of Biennial Transparency Reports under the Paris Agreement, which must be submitted by 31 December 2024.

[7] Referring here to accounting under Art.4(13) and reporting 13(7)(b).

[8] PA, Art.4(13); and art. 13(7)(b).

[9] Decision 4/CMA.1, Annex II,

[10] See Decision 4/CMA.1, para 13; and Decision 1/CP.21, para 32. 


[12] Decision 4/CMA.1, Annex II, para 1(a).

[13] Ibid. Paras 1(b) and (c).

[14] n(12).

[15] Dec 18 CMA.1, Annex, para 64(f), confirms that states must declare if they intend using ITMOs to achieve their NDC.

[16] PA, Art. 6.2.

[17] The PA does not clearly state that a purchase transaction should underpin ITMOs.

[18] PA, Art. 4(3)

[19] Decision 18/CMA.1, para 1

[20] PA, Art.13(1).

[21] PA, Art.6(2).

[22] Decision 1/CP.21, para 107.

[23] For instance, the EU Emissions Trading Scheme and the South Korean Emission Trading Schemes.  See Brescia et al, ibid.

[24] Apart from EU Member States and Iceland which have been provisionally implementing their commitments under the Doha Agreement.

[25] See Vienna Convention on the Law of Treaties, Art.54(b),

[26] An example of such ‘institutional transfer’ is the shifting of the Adaptation Fund under the authority and guidance of the CMP.

[27] Certain countries, like Brazil, have voiced support for the CDM. Others, like some EU member states, have called for the CDM to end.

[28] PA, Art. 6.2.

[29] DT.CMA2.i11a.v3, 

[30] Decision 4/CMA.1, FCCC/PA/CMA/2018/3/Add.1, Annex II, para 1(a-d); and Decision 18/CMA.1, FCCC/PA/CMA/2018/3/Add.1 paras 65-79. See section below.

[31] The modalities are still under negotiation, see Ibid. See also Benito Müller and Axel Michaelowa, ‘How to Operationalize Accounting under Article 6 Market Mechanisms of the Paris Agreement’ (2019) Climate Policy 1.

[32] PA, Art. 6(4-5).

[33] Ibid., Art 6(4)(d).

[34] DT.CMA2.i11b.v3, Annex, Section XI,

[35] For an detailed outline of the policy options for such transition see Brescia et al. (2019), above at 1.


[37] Decision 4/CMA.1, Annex II, para 1(a).

[38] Decision 4/CMA.1, Annex I, 5(f).

[39] Decision 18/CMA.1, paras 22, 75(h).

[40] Above n(1), p.40.

[41] PA, Art.4(4).