INTERVIEW - TEPCO Wants More Carbon Credit from CDM
Date: 18-Sep-06
Country: JAPAN
Author: Ikuko Kao
Kyoto ties some 35 countries to legally binding greenhouse gas emissions limits by 2012 and in 2004 Japan -- the world's fifth biggest polluter -- exceeded that cap by 14 percent.
In order to help meet the target Japanese companies are increasingly buying in a global carbon market, set up by the Kyoto pact, which allows companies in industrialised countries to pay poor countries to cut emissions on their behalf.
TEPCO is Japan's largest carbon dioxide (CO2) emitter and will add to the 5 million tonnes of so-called carbon credits it has bought since 2004, said Manabu Hirano, the manager at TEPCO's international environmental business group, who declined to estimate its future buys.
"Our company accounts for almost a tenth of Japan's total CO2 emission and we are responsible for leading the move to cut emission," Hirano told Reuters in an interview.
TEPCO's carbon dioxide emissions have risen nearly a third to 107.3 million tonnes in the year to March 2006, from 84.10 million tonnes in 1990/91, the baseline Kyoto year.
Under the Kyoto trading scheme, developed world companies snapped up some 75 million tonnes of carbon credits, worth nearly $900 million, from countries like China and India in the first three months of 2006.
Companies from the developed world invest the money in emissions reductions projects, destroying super greenhouse gases like HFC23, nitrous oxide and methane, or cutting CO2 emissions.
One carbon credit is equivalent to a 1 tonne cut in CO2 emissions.
Past prices for credits were as little as $7 per tonne, but have since risen to double digits, but better value can be had by taking a stake in projects. In Thailand TEPCO invested 70 million yen ($595,100) to get 240,000 tonnes worth of credits.
Japan is the only Asian country which has a Kyoto target and it has to cut CO2 emission by 6 percent from the 1990 level by the 2008-2012 period. But its emissions increased by 7.4 percent to 1.3 billion tonnes in the year to March 2005.
RED TAPE
Red tape was complicating the process of buying carbon credits, Hirano said.
Each project has to pass through various hoops, such as adhering to certain accepted methods for cutting emissions, and proving that cuts have actually taken place.
"The UN changes methodologies to calculate CO2 credits," Hirano said.
"Changes often come at short notice. That completely alters business plans. That means we do not get as much credits we originally expected because an entire process to negotiate... often takes one or two years."
TEPCO had bought carbon credits so far from countries including Chile, China, Honduras and Thailand and was eyeing projects to destroy super greenhouse gases HFC23 and nitrous oxide as having high potential, Hirano said.
Nitrous oxide is a leftover of the fertiliser and nylon business and is 310 times more potent than CO2.
HFC23 is a byproduct of the refrigerant industry, and is 12,000 times stronger than CO2.
TEPCO has a voluntary target to reduce the 1990 level of 0.4 kilogrammes of CO2 emitted per kilowatt-hour by 20 percent by 2008-2012.