By Michael Szabo
COLOGNE, Germany, May 9 (Reuters) - The European Commission says it is standing by a desire to overhaul UN-led carbon trading rules to make it more difficult for developing nations to earn carbon offsets from cutting greennhouse gas emissions.
At present rich countries can meet their own emissions limits under the Kyoto Protocol by investing in cuts in the developing world.
That scheme, called the Clean Development Mechanism (CDM), needs reform after 2012 when the first round of Kyoto expires, said Peter Zapfel, a senior official in the EU executive body's environment department.
Developing countries needed to cut emissions against a certain minimum standard -- for example per tonne of output in certain industrial sectors -- Zapfel said.
"You have the CDM in one corner, which is voluntary, per project, with credits (offsets) for everything you reduce," Zapfel said on the sidelines of a carbon markets conference in Germany.
"And then in the other corner, you have something like (the EU) carbon market, which has several sectors under one arrangement, they're all mandatorily covered, and they actually have to reduce emissions and respect the cap before they can have free allowances."
"We recognise fully when told by business that in the carbon market there is uncertainty, but the main source of the uncertainty is how we go ahead with the international post-Kyoto agreement," Zapfel said.
In January, the EU annouced proposals on how to meet its emissions reduction target of a 20 percent reduction below 1990 levels by 2020.
The executive body said the EU would up that target to 30 percent, and increase the number of carbon offsets importable into its trading scheme, if a successor to the Kyoto Protocol is agreed.
According to a World Bank report published at the conference, the CER market was worth some $13 billion in 2007.
"In the end, in a global carbon market, all the major emitters around the world should be subject to a cap-and-trade mechanism like (the EU)." (Editing by Gerard Wynn)