African projects win Norwegian CO2 credit tender - CNBC Africa

African projects win Norwegian CO2 credit tender

Western Africa

by Reuters 0

African projects win Norwegian CO2 credit tender. Photo: Wikimedia

The Norwegian government has selected four African projects in its latest tender to buy carbon credits to meet its emission targets, it said, paying several times the current market rate.

The deal comes as negotiators from more than 190 countries are working towards a global climate deal to stave off the worst effects of climate change.

Norway chose water purification initiatives in Nigeria and Malawi, a landfill project in Sudan and a project to deliver low emission cooking stoves to villages in the Democratic Republic of Congo, a statement from The Nordic Environment Finance Corporation (NEFCO), which manages the tenders, said.

The four projects are expected to deliver a total of 4.9 million United Nations (U.N.).-based carbon credits called Certified Emission Reduction (CERs).

CERs are the currency of the U.N.'s Clean Development Mechanism (CDM) which allow investors in emission reduction projects located in poor nations to earn carbon credits that governments and companies can use to offset emissions.

It has issued developers with more than 1.6 billion carbon offset credits, but a lack of demand and oversupply has led prices to collapse from above 13 euros four years ago.

One of the main objectives of NEFCO's tenders is to buy "from projects whose survival or continued emission reductions depend on a higher carbon price than achievable under current market conditions," NEFCO said in the statement.

Credits secured from the African projects mean NEFCO's Norwegian Carbon Procurement Facility has reached its target to buy a total of 30 million credits by 2020.

On average projects under the scheme have secured a price of 2.23 euros per CER, NEFCO said, almost four times their current market value of 0.58 euros.

NEFCO did not specify the exact price given to the four African projects but facility manager Ash Sharma said by phone it was in the region of the portfolio's average price.

The Norwegian government has selected four African projects in its latest tender to buy carbon credits to meet its emission targets, it said, paying several times the current market rate.

The deal comes as negotiators from more than 190 countries are working towards a global climate deal to stave off the worst effects of climate change.

Norway chose water purification initiatives in Nigeria and Malwai, a landfill project in Sudan and a project to deliver low emission cooking stoves to villages in the Democratic Republic of Congo, a statement from The Nordic Environment Finance Corporation (NEFCO), which manages the tenders, said.

The four projects are expected to deliver a total of 4.9 million United Nations (U.N.).-based carbon credits called Certified Emission Reduction (CERs).

CERs are the currency of the U.N.'s Clean Development Mechanism (CDM) which allow investors in emission reduction projects located in poor nations to earn carbon credits that governments and companies can use to offset emissions.

It has issued developers with more than 1.6 billion carbon offset credits, but a lack of demand and oversupply has led prices to collapse from above 13 euros four years ago.

One of the main objectives of NEFCO's tenders is to buy "from projects whose survival or continued emission reductions depend on a higher carbon price than achievable under current market conditions," NEFCO said in the statement.

Credits secured from the African projects mean NEFCO's Norwegian Carbon Procurement Facility has reached its target to buy a total of 30 million credits by 2020.

On average projects under the scheme have secured a price of 2.23 euros per CER, NEFCO said, almost four times their current market value of 0.58 euros.

NEFCO did not specify the exact price given to the four African projects but facility manager Ash Sharma said by phone it was in the region of the portfolio's average price.

Comments