BASF Gains Extra Carbon Credits Under World Bank Project

21 June 2004 00:01  [Source: ICB Americas]

BASF is poised to earn extra carbon credits under the European Union’s (EU) emissions trading program, due to start in January 2005, by investing in a World Bank program for emission reduction projects in developing countries.

The EU is introducing new legislation that would enble European companies in the trading plan to use credits from projects around the world that cut carbon dioxide (CO2) emissions.

BASF’s participation in the World Bank’s Community Development Car-bon Fund (CDCF) will enable it to receive certified CO2 emission rights that will be accepted under the EU trading system. The CDCF projects are recognized as clean development mechanisms, which were introduced within the Kyoto Protocol to encourage emissions reductions in the developing world.

The CDCF is a pilot program in-tended to test the effectiveness of the mechanisms for providing global climate protection.

BASF, which is one of six companies involved in CDCF, is contributing $2.5 million to the fund. The only other chemicals participants are the Japanese oil and petrochemicals companies Nippon Oil Corp. and Idemitsu Kosan.

Charlotte Streck of the World Bank told a press conference in Frankfurt last week that BASF is “one of the first companies to recognize the value of the CDCF as an instrument for acquiring emission rights and for combining them with responsible investments and development assistance.”

One of the projects supported by BASF is the use of wind and water as energy sources for power plants at Jeffreys Bay, South Africa, which will cut CO2 emissions by 300,000 metric tons in 14 years. The project provides free energy to underprivileged households while ensuring reliable water and electricity supplies.

“Participating in the fund is an excellent opportunity for BASF to acquaint itself with the complex mechanism of global greenhouse gas trading,” says Dirk Drechsel, BASF’s coordinator in greenhouse gas trading. “The company is backing only those projects that result in both a reduction in emissions as well as an improvement in the quality of life of the population.”

Meanwhile, BASF has released figures showing that last year its greenhouse gas emissions fell by 7.2 percent per ton of sales product. Air and nitrogen emissions decreased by 4 percent and 8.5 percent, respectively.

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