Norway still needs to buy around 20 million CERs to put it on track to meeting its 2020 Kyoto Protocol emissions target after contracting a little over 10 million over the past year via an open tender.
The country is one of the few remaining buyers of the UN-backed carbon credits and is negotiating deals with developers on a case-by-case basis to ensure it will have enough.
“We are looking at contracting around 80 million CERs for calculation purposes,” said Sigurd Klakeg, an official in Norway’s environment ministry who oversees the programme.
He said this would ensure the country gets the expected 60 million CERs it needs to hit its target under Kyoto’s second commitment period (2013-2020).
SAME, BUT DIFFERENT
By Dec. 2015, Norway had met its initial target to buy 30 million CERs via two tenders held by the Nordic Environment Finance Corporation (NEFCO).
The NEFCO deals netted more than 30 million credits from some 17 projects, at an average price around €2.20 each – almost six times the current secondary market price for the credits in Europe.
The government has opted to procure the remaining credits itself via an open tender process on its website, www.carbonneutralnorway.no.
It has retained NEFCO to do due diligence and has kept the same strategy of sourcing from CDM projects whose survival or continued emissions reductions depend on a higher carbon price.
This process selects based on several factors including how vulnerable existing projects are and the offered price. It blacklists several project types including hydro and wind schemes outside the poorest nations, industrial gas destruction (HFC-23 and N2O from adipic acid) and coal power without CCS.
Klakeg said Norway is prepared to pay a maximum of €4 per CER for projects in least developed countries.
He added that the most volume contracted has so far has come from landfill gas capture schemes in Brazil, and that the country had bought no CERs from projects in China, which accounts for the largest share of those registered under the CDM.
FACTFILE
- With almost all of its power generated from hydroelectric facilities, Norway faces costs of well over €100 per tonne to substantially reduce emissions at home.
- It has a binding Kyoto target to reduce GHG emissions 16% below 1990 levels by 2020, but its annual output has barely changed since 2008 at around 53 million tonnes, leaving it off course towards meeting its goal.
- By using more than 30 million CERs to meet its post-2012 Kyoto target, the Norwegian government is on course to break its pledge that it would meet two-thirds of the goal with domestic measures.
By Ben Garside – ben@carbon-pulse.com
