Emission Reduction Units (ERUs) are credits for emission reductions achieved with projects resulting from the Joint Implementation (JI). JI is an arrangement under the Kyoto Protocol allowing industrialized countries with a greenhouse gas reduction commitment (so-called Annex 1 countries) to invest in emission reducing projects in other industrialized countries.
Annex 1 countries with relatively high emission abatement costs can comply with their Kyoto targets by using credits from lower cost JI projects. A JI project might involve, for example, replacing a coal-fired power plant with a more efficient combined heat and power plant.
Most JI projects are expected to take place in Eastern Europe and the former Soviet Union, countries where the costs of reducing emissions are considered lower. One ERU signifies an emission reduction of one ton of CO2 equivalent.