Trading in Credits — the Absence of a Regime and the Real Machinery
Trading in carbon credits is not regulated by separate legislation in Georgia: there is no emissions-trading scheme, no national registry of credits and no issuance rule. What genuinely exists in law — and forms this page’s foundation — is the machinery of emission control and measurability: authorization, monitoring, reporting and verification. This machinery creates no trading market, but it is precisely what supplies a project with the data on which the value of any credit stands; so a discussion of credit trading is in reality a discussion of the quality of this measurement apparatus.
Definitions — the Language of Measurability
The law’s definitions fix the concepts by which the world of emissions is measured: integrated control — a pollution-regulation system resting on the integrated control of pollution of land, water and air; best available technology — the balance of effectiveness and economic accessibility; and the verifier — a person accredited to verify the annual greenhouse-gas emissions report by the unified national accreditation body or by a conformity-assessment body accredited within the framework of European accreditation cooperation. That definition enters into force from 1 January 2028. In other words, the national system of verifier accreditation is still taking shape, and every participant must reckon with that environment.
The content of the authorization application is likewise determined by law: besides the information contemplated by the General Administrative Code, the application must contain a description of the installations and activities, including technologies, that may cause greenhouse-gas emissions; information on the raw and auxiliary materials whose use may cause emissions; information on the emission sources determined by government decree; a draft monitoring and reporting plan; and a short non-technical summary of all of this — executed in non-technical language, with graphical or illustrative materials where necessary. The authorization, besides the general requirements, contains the name, identification number or personal number and address of the activity subject; a description of the activity and the emissions; the monitoring plan, composed in conformity with the requirements determined by government decree and approved together with the decision; and the obligations connected with reporting. This detailed list is precisely the data on which subsequent verification stands — and accordingly, the apparatus that underpins any credit.
Authorization — the Legal Basis of Emission
For activities determined by government decree, an authorization of greenhouse-gas emissions is required. Apart from aviation activities, it is issued by the National Environment Agency, and for aviation activities — by the Civil Aviation Agency. The authorization is issued for an unlimited term and is accompanied by a monitoring plan approved together with the decision. Applications and decisions are published on the environmental information portal, creating transparency of data — a rule that under the law enters into force from 1 January 2028.
Monitoring, Reporting and Verification
The activity subject conducts monitoring on the basis of the monitoring plan, according to the categorization of installations, the flows of sources and the corresponding methodology. Annually, no later than 31 March of the respective year, an annual emissions report is submitted in a form verified by the verifier — submission of the report discharges the reporting duty. The verified report is published within 5 working days of receipt. The requirements of the offsetting and reduction scheme for international aviation are established by an order of the director of the Civil Aviation Agency. The authorization may be declared void where within 5 years the activity has not commenced, or a 2-calendar-year suspension has not been substantiated by repair works.
At the level of financial regulation, the National Bank’s sustainable-finance guidance defines disclosure-based approaches for banks — that institution exists, but it creates no legal regime for trading credits and does not shape the credit as a distinct asset. So a person contemplating trading volume obtains ready-made market rules neither from the environmental law nor from banking regulation: they are created by contract and international standards.
Practical Recommendations for a Trader
First, harden the data chain — authorization, monitoring plan, annual report and verification form a single system, and its weakness destroys the overall value of the credit. Second, work from the assumption that no national scheme exists: the definition of the credit, the prevention of double counting and the transfer of ownership are subjects of the contract. Third, the national framework of verifier accreditation enters into force from 2028 — verify who verifies your report and under which accreditation. Fourth, use the reports published on the portal — transparency is a common resource of the market.
And finally: the quality of the data is the quality of the credit — this simplest rule sums up the whole logic of this market.
Frequently Asked Questions
Below are the most frequent questions about carbon credits and the regulation of emissions.
Does a national scheme for trading credits exist?
No — there is no emissions-trading scheme, no national registry of credits and no issuance rule; what exists is the machinery of emission authorization, monitoring, reporting and verification.
Who issues the emissions authorization?
Apart from aviation activities — the National Environment Agency; for aviation activities — the Civil Aviation Agency. The authorization is issued for an unlimited term.
When is the annual emissions report submitted?
Annually, no later than 31 March of the respective year, in a form verified by the verifier; the verified report is published within 5 working days of receipt.
How We Help on Legal.ge
The lawyers of Legal.ge assist in preparing the emissions-authorization application, in presenting the monitoring and reporting plan, and in drafting the contract terms of credit trading that, absent a national scheme, depend entirely on the parties’ agreement. Contact us — a sound documentary foundation is the management of this market’s chief risk.