Credit Trading and the Treaty-Based System
Trading in carbon credits does not exist as a separate regime within Georgian legislation: no national emissions-trading scheme has been created, nor a registry of credit issuance. What forms this page’s foundation are three elements: the regime of authorization of greenhouse-gas emissions, the norm on international cooperation, and the rule of the supremacy of international treaties. That last element explains why credits are a reality despite the absence of domestic regulation: credits are linked to international treaties and the schemes existing within their framework, and such a treaty stands above domestic normative acts.
The Climate-Protection Obligation
The law obliges the activity subject to observe the norms of emission of greenhouse gases into the atmosphere and to carry out reduction measures; emission is regulated on the basis of the integrated pollution-control system, while the legal regime of climate protection within Georgia’s jurisdiction is established by Georgian legislation. For activities determined by government decree an authorization of greenhouse-gas emissions is required, issued — apart from aviation activities — by the National Environment Agency, and for aviation activities by the Civil Aviation Agency. The authorization is issued for an unlimited term, accompanied by a monitoring plan, and its conditions are amended in agreement with the issuing organ. It may be declared void where within 5 years the activity has not commenced, or a suspension of 2 calendar years has not been substantiated.
The authorization application, besides the general requirements, contains a description of installations and activities, information on raw and auxiliary materials, information on emission sources, a draft monitoring and reporting plan and a non-technical summary. The authorization is transferable: the activity subject may transfer it fully or partially to another person where this does not contradict the essence of the activity contemplated by the authorization — the transfer embraces both rights and obligations. The basis of transfer is a joint application of the holder and the recipient, a contract or another confirming document; the application is examined under the simple administrative proceeding, and the recipient carries out the activity only after the decision. This transferability is the lawful route for restructuring projects and changing the investor.
The monitoring, reporting and verification regime sits in the same block: the activity subject conducts monitoring on the basis of the monitoring plan and submits, annually and no later than 31 March of the respective year, an annual emissions report — in a form verified by a verifier; submission of the report discharges the reporting duty, and the verified report is published on the environmental information portal within 5 working days of receipt. The issuing organ may, before approving the monitoring plan, create an expert commission or invite an expert, who examines the plan and submits a conclusion. The person is obliged to notify the issuing organ immediately of any planned change in the operating condition that may affect the emissions.
International Cooperation
The law establishes that Georgia concludes, ratifies, denounces or accedes to international treaties and agreements in the sphere of environmental protection that regulate Georgia’s relations with other states, associations of states and international organizations. This norm describes the lawful channel of the state’s entry into the climate sphere: international schemes connected with credits attach to the legal system precisely through this route.
The Supremacy of Treaties
The decisive rule is the following: an international treaty or agreement of Georgia, if it does not contradict the Constitution of Georgia, has superior legal force with respect to domestic normative acts. So if an international scheme connected with credits is anchored in a treaty, its requirements stand above domestic rules — and that is the legal bridge through which credit trading actually functions even in the absence of a national scheme.
What This Means in Practice
First, the legal basis of an emission-reduction project is national — the authorization and the monitoring plan; the international recognition of the credit is determined by treaties and international schemes. Second, define precisely in the contract which international framework serves the credit — the rule of treaty supremacy works only when the framework genuinely rests on an international obligation. Third, domestic absence does not mean a vacuum of responsibility: the requirements of the environmental law apply in full, and the project’s compliance is described by them.
Frequently Asked Questions
Below we answer the most frequent questions about carbon-credit trading.
What obligation does an operator carry in climate protection?
To observe the norms of emission of greenhouse gases and to carry out measures for their reduction; emissions are regulated on the basis of the integrated pollution-control system.
Does an international treaty prevail over domestic acts?
Yes — where it does not contradict the Constitution of Georgia, it has superior legal force in relation to domestic normative acts.
How does international cooperation in environmental protection proceed?
Georgia concludes, ratifies, denounces or accedes to the international treaties and agreements regulating its environmental relations with other states and international organizations, in the procedure established by law.
How We Help on Legal.ge
Before participating, verify the authorization requirements and the content of the monitoring plan; in negotiations with the international side, rely on frameworks and indications established by treaty; and remember the rule: a treaty that does not contradict the Constitution prevails over domestic acts — that is the instrument through which the requirements of international credits become honored in the Georgian legal space. The lawyers of Legal.ge assist in verifying authorization requirements, assessing the monitoring plan and negotiating on the basis of treaty frameworks.