This Law provides for harmonising Cypriot legislation with several European Directives establishing a scheme for greenhouse gas emission allowance trading, and therefore the Law contributes to the levels of reductions scientifically necessary to avoid dangerous climate change, through scaling up greenhouse gas emission reductions, and aims at achieving the climate neutrality objective and the European Union's climate targets, as set out in Regulation (EU) 2021/1119 and consequently achieving the objectives of the Paris Agreement. This Law applies to specified activities and to the greenhouse gases specified in the attachment. The Law defines the following relevant terms: greenhouse gas emission permit; greenhouse gas; public enterprise; emissions; historical aviation emissions; port of call; clean development mechanism; joint implementation mechanism; emission reduction unit; certified emission reduction; ship; contract for difference; carbon contract; tonne of carbon dioxide equivalent. The Law covers the following matters: air and sea transport and allocation and assignment of rights for the aviation and navigation activities; total quantity of allowances for air transport; method of allocating air transport allowances through auctioning; allocation of rights in maritime transport activities; introduction of requirements for maritime transport; monitoring and reporting on emissions from maritime transport; shipping company management authority.
Part III of the Law concerns fixed installations and applies to greenhouse gas emission permits and to the allocation and transfer of allowances for the activities other than aviation activities and maritime transport activities. Particularly, this Part focuses on: application, conditions and content of greenhouse gas emission permits; conditions and procedure for issuing a greenhouse gas permit; Community quantity of allowances to be allocated each year; right of the competent authority to auction all allowances not allocated free of charge in compliance with European legislation; use of free allocation for supporting investments under the Modernisation Fund; free allocation to electricity generation installations for the modernisation, diversification and sustainable transformation of the energy sector; national implementing measures. Part IV concerns provisions for air transport, maritime transport and fixed installations, and focuses on: allowing aircraft operators to use credits approved by the Parties to comply with their obligations to cancel units in respect of the notified quantity; project activities; transfer, return and cancellation of rights; monitoring, verification and accreditation; access to information; support for infrastructure development activities; third country measures to limit the impact of aviation on climate change; optional exemption for installations emitting less than 2500 tonnes. Part IVa concerns emission trading scheme for buildings, road transport and other sectors, and covers the following: quantity of rights at European Union level; greenhouse gas emission permits.
Part V concerns administrative and criminal provisions, including duties and powers of inspectors; offences and penalties; imposition of administrative fines.