The credibility of global carbon trading took a step forward yesterday after the UN announced that, after a series of delays, it had finally activated a new electronic system that will make it possible for countries signed up to the Kyoto protocol to seamlessly trade carbon credits.

The International Transaction Log (ITL) allows carbon credits generated through the UN's Clean Development Mechanism (CDM) and Joint Implementation (JI) emission reduction projects to be electronically transferred into national registries in order to help those countries meet their emission targets.

Japan yesterday became the first country to connect to the ITL and Switzerland and New Zealand are scheduled to start real-time trading operations before the end of the year.

The system is expected to improve confidence in the UN's emission trading mechanisms because it checks the transfer of credits against trading rules to ensure "only genuine emission reductions are traded".

"The entry of the ITL into real-time operation sends a clear signal to the carbon market that trading can go ahead as planned," said Yvo de Boer, the UN's top climate change official. "Market players now have the assurance that the cornerstone of the Kyoto trading system is in place before the actual start of the Kyoto accounting period on 1 January 2008."

Trevor Sikorski, director of analyst firm Point Carbon, said that the introduction of an electronic trading system should remove some of the " low-level delivery risk" associated with the UN trading mechanisms, but warned that the system would do little to appease concerns over processes governing the issuance of carbon credits.