Ireland has enough CO2 credits for Kyoto target
Ireland is placing on hold its state programme to buy carbon credits, environment minister John Gormley told Irish parliamentarians this week.
A fall in emissions after the recession has put Ireland on track to meet its Kyoto targets with the help of already-purchased credits. This means the country will stop buying certified emission reductions (CERs) and assigned amount units (AAUs), in order not to end up with a surplus, Gormley said.
In 2008 and 2009, the National Treasury Management Agency (NTMA) bought 5.3m credits on behalf of the government, at an average price of €13.90/tonne of CO2 equivalent (tCO2e).
ICIS Heren understands Ireland can also expect to receive further volumes from €25.9m investments in carbon funds managed by the World Bank and European Bank for Reconstruction and Development.
That sum would buy around 2.0m tCO2e at current secondary CER prices, bringing the Irish total to an estimated 7.3m by 2012.
New emissions forecasts from the Environment Protection Agency (EPA) indicate this will be enough for Ireland to meet its Kyoto commitment of emitting just 62m tCO2e/year.
Ireland is now expected to need 6.5m-9m carbon credits to hit its Kyoto targets, according to a spokesman for the environment ministry on Wednesday. A portfolio of around 7.3m would put the NTMA in the middle of the EPA's range.
If emissions only reach the lower level of the EPA's forecasts, it is possible that Ireland will end up with a surplus of CERs and AAUs. In that case, the country would seek to carry this surplus forward to use under a new commitment period.
"We have no proposals to sell credits," the environment ministry spokesman said.
Polish AAU deal in doubt
The decision to stop buying carbon credits puts a question mark over alleged negotiations to buy AAUs from Poland. So far, Ireland has bought mostly CERs, according to the environment ministry. But there are some AAUs in the mix as well.
Last year, Poland singled out Ireland as a potential buyer - along with Spain and Japan - of some of its 40m AAU surplus (see EDCM 9 November 2009). But if emissions begin to creep up again, the NMTA may recommence CER and AAU purchases.
"All this is based on recent projections and, in the current economic climate, an unusually high degree of uncertainty is attached to all projections," said the environment ministry spokesman.
"Our purchasing requirements are being kept under review and will be revised as necessary in the light of future projections." IS
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