International Transaction Log

The ITL verifies transactions proposed by registries to ensure they are consistent with rules agreed under the
Kyoto Protocol. Each registry sends transaction proposals to the ITL, which checks each proposal and returns to
the registry its approval or rejection. Once approved, registries complete the transaction. In the event that a
transaction is rejected, the ITL sends a code indicating which ITL check has been failed and the registry
terminates the transaction.

Data Exchange Standard (4322 kB) (DES) coordinate the functions of systems when processing
transactions. They define technical requirements for the communication between the ITL and registries. They
also define the checks performed by the ITL, embodying the policy rules agreed by Parties for the accounting of
their assigned amounts and their use of the Kyoto mechanisms.

Each registry is to be connected to the ITL through secure communication channels established across the
Internet. These connections will allow a registry to receive an immediate response from the ITL, typically within a
matter seconds after sending the transaction information.

The administrator of the ITL is the UNFCCC secretariat, which has awarded a contract for the development and
operation of the ITL to leading companies in the field of IT services. The ITL is hosted at two commercially-
operated data centres, one for primary operations and the other as a backup site, both located in the United
Kingdom. A service desk, also based in the United Kingdom, has been put in place to support the administrators
of the ITL, registries and the CITL.

RSA Forum

The ITL administrator has convened the Registry System Administrator Forum in order to ensure that technical
and management issues across registry systems are effectively coordinated. The Forum met for the first time in
April 2006 and typically meets as a full group three times a year. In addition, groups are established under the
Forum to conduct more detailed work in preparing and implementing procedures of joint concern to
administrators of all registry systems.

Security Working Group

In 2013, the ITL administrator initiated the security working group. The working group established objectives
and made plans to adopt the ISO/IEC 27001 standard for managing the security of information assets within the
systems supporting emissions trading under the Kyoto Protocol, as recommended in the 2012 report of the
ITL administrator (562 kB) .

The objectives of the working group are to raise the awareness of all stakeholders involved in emission trading
under the Kyoto Protocol of the need for information security and to ensure a comprehensive approach to
information security management.

The working group initiated its work by defining and valuating the assets in the scope of securing emission
trading related information. Based on the agreed scope, the working group analysed known threats and
vulnerabilities, and agreed on a baseline of controls.

A baseline implementation evaluation confirmed that there are varying levels and degrees of maturity and stages
in terms of information security within the different registries. As it is important to understand the impacts,
approach and planning of further implementation, the security working group currently is in the process of
defining a viable plan and roadmap that will accommodate the different statuses and constraints. This roadmap
will be finalized for consideration by SBI40 in June 2014.
https://unfccc.int/kyoto_protocol/registry_systems/items/2723.php

Registry systems under the Kyoto Protocol

Emission targets for industrialized country Parties to the Kyoto Protocol are expressed as levels of allowed
emissions, or “assigned amounts”, over the 2008-2012 commitment period. Such assigned amounts are
denominated in tonnes (of CO2 equivalent emissions) known informally as “Kyoto units”.

The ability of Parties to add to their holdings of Kyoto units (e.g. through credits for CDM or LULUCF activities)
or move units from one country to another (e.g. through emissions trading or JI projects) requires registry
systems that can track the location of Kyoto units at all times.

Two types of registry are being implemented:

 Governments of the 38 Annex B Parties are implementing national registries, containing accounts within
which units are held in the name of the government or in the name of legal entities authorized by the
government to hold and trade units.
 The UNFCCC secretariat, under the authority of the CDM Executive Board, has implemented the CDM
registry for issuing CDM credits and distributing them to national registries. Accounts in the CDM
registry are held only by CDM project participants, as the registry does not accept emissions trading
between accounts.

In addition to recording the holdings of Kyoto units, these registries “settle” emissions trades by delivering units
from the accounts of sellers to those of buyers, thus forming the backbone infrastructure for the carbon market.

Each registry will operate through a link established with the International transaction log put in place and
administered by the UNFCCC secretariat. The ITL verifies registry transactions, in real time, to ensure they are
consistent with rules agreed under the Kyoto Protocol. The ITL requires registries to terminate transactions they
propose that are found to infringe upon the Kyoto rules.

In verifying registry transactions, the ITL provides an independent check that unit holdings are being recorded
accurately in registries. After the Kyoto commitment period is finished, the end status of the unit holdings for
each Annex B Party will be compared with the Party’s emissions over the commitment period in order to assess
whether it has complied with its emission target under the Kyoto Protocol.

EU emissions trading

Domestic or regional emissions trading schemes that use Kyoto units also undertake their settlement through
these registry systems. For example, under the second phase of the European Union emissions trading
scheme, EU allowances are specific Kyoto units which have been designated as being valid for trading under
the scheme. Transactions in EU allowances are therefore recorded automatically as transactions under the
Kyoto Protocol.

As EU trading legislation sets in place rules over and above those agreed for the Kyoto Protocol, a supplemental
transaction log has been implemented by the European Commission. The Community Independent Transaction
Log has been in place since the start of the scheme in 2005 and EU registries are now operating with it.

For the start of the Kyoto commitment period in 2008, EU registries are to switch their connections from the CITL
to the ITL. The ITL will conduct “Kyoto checks” on transactions proposed by both EU and non-EU registries. In
the case of transactions involving EU registries, the ITL will forward information to the CITL so that it can
conduct “supplementary checks” defined under the EU scheme.