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Surplus carbon emissions for sale

Deal with Japan could help make household heating greener

By Victor Velek
Staff Writer, The Prague Post
April 16th, 2008 issue

The Czech Republic is nearing a deal to sell its surplus carbon dioxide credits to Japan under the Kyoto Protocol. The deal could bring in billions of crowns for the country.
The Environment Ministry is in talks with several countries that are having problems meeting their Kyoto emissions obligations, said ministry spokesman Jakub Kašpar. The Czech Republic has some 150 million metric tons of surplus emissions credits.
“The negotiations with Japan are the most advanced,” Kašpar said. The main parameters of the deal have been agreed upon and the transaction is expected to be closed by the middle of the year, he added.
The ministry has not disclosed the price of the deal nor how large a surplus Japan is interested in. Overall, the Czech carbon surplus is worth more than 10 billion Kč ($626 million), Kašpar said. However, some estimates place the sum the country could earn as high as 30 billion Kč.
“We don’t want to hesitate in selling the surplus emissions credits,” Kašpar said, as other countries like Ukraine and Russia also possess excess emissions allowances. Once these countries put their “leftover” allowances on the block, prices are likely to drop, Kašpar said.
In contrast to the European Union’s emissions trading scheme, where carbon credits are swapped by companies, Kyoto emission surpluses are traded by governments. Since the Kyoto commitment period lasts from 2008 through 2012, this year is the first opportunity to capitalize on surplus national allowances.
Unlike Western states, post-communist countries have no difficulty in meeting environmental pledges, as their transition toward market economies led to the elimination or modernization of industrial polluters.
According to Kašpar, the country now emits 23 percent less greenhouse gases than in 1990, the Kyoto reference year, while it vowed to cut its emissions only 8 percent.
The Environment Ministry would like to see yields from any carbon deals go toward replacing the coal-fired household boilers that plague the countryside with dust particles.
“Although dust emissions don’t contribute to climate change, they cause significant health issues,” Kašpar said. “It is one of the country’s biggest environmental problems.”
The state-controlled power giant ČEZ has put forward an alternative plan for the carbon money.
“We proposed spending part of the income from emissions credits on testing a carbon capture and storage unit,” said ČEZ spokeswoman Eva Nováková.
Carbon capture and storage (CCS) is a new technological concept based on separating carbon dioxide from the exhaust of large power plants, with the carbon subsequently being stored underground.
The Environment Ministry has said it will not support ČEZ’s proposal, while the Industry and Trade Ministry is more open to the idea.

Victor Velek can be reached at vvelek@praguepost.com


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