By Claire-Ann M. C. Feliciano

Sale of carbon credits urged

Posted on January 09, 2013

RENEWABLE ENERGY (RE) developers in the country should take advantage of their carbon credits by selling these to European firms that need them.

Participation in “program of activities� allows RE developers to take part in carbon trading without shelling out a big expense for registering their projects. -- AFP
“Philippine developers of renewable energy projects can benefit from generating carbon credits that are eligible to be sold into the European Emissions Trading Scheme (ETS) beyond 2012,” Carbonergy Business Consultancy Services said in a statement yesterday.

A certified emission reduction (CER) certificate is issued per ton of carbon dioxide avoided, and serve as currency in carbon trading.

“Developing countries like the Philippines are entitled to undertake projects that reduce carbon emissions. There is a certificate for every ton of carbon avoided by the project. If a project generates so many megawatt-hours from renewable energy, the developer can claim the equivalent in carbon certifications and these can be sold in the international markets,” Carbonergy Chief Executive Officer Peter Pembleton explained in a phone interview yesterday.

Mr. Pembleton said developers of RE projects can tap Carbonergy, an RE and carbon consulting firm based in Manila, for the inclusion of their projects in the company’s “RE2Grid Programme of Activities” (PoA). The program will pave the way for trading of their carbon credits in the European markets.

A “program of activities,” under the Clean Development Mechanism (CDM) of the Kyoto Protocol, groups projects that reduce greenhouse gas emissions, making it less costly to register them compared to registering each project separately.

“We will have discussions with interested developers, and see if their projects are eligible. If we agree to proceed, the developer and Carbonergy will enter into a participation contract. Then we will develop the documentation and process to assist the RE developers claim their credits,” Mr. Pembleton explained.

Carbonergy said the ETS will accept only carbon credits from least developed countries, which means Philippines is excluded.

However, it noted the ETS will still accept CERs from projects included in the PoA that are registered before the end of 2012, even if these projects have been added to the PoA after last year.

Carbonergy’s PoA was registered on Dec. 27, hence, developers can register their projects with Carbonergy and still trade their credits in the ETS.

Mr. Pembleton said European countries that must meet emissions targets under the Kyoto Protocol are keen on buying CERs.

“The CDM is a mechanism between developed and developing countries. Emissions trading is done in big commercial markets, and the biggest trading market is in London. The UK, France, Germany and Spain are interested and use [CERs] to offset their emissions,” Mr. Pembleton said.

He added that 80% of the carbon market is in Europe. But other countries like Japan and Australia are also buying carbon credits.

With Carbonergy’s RE2Grid program, Mr. Pembleton said the process of applying for carbon credits will be simpler and more cost effective than registering each project separately.

“The developer is also spared from the lengthy development and approval procedures that have, in some Philippine cases, resulted in negative outcomes,” the statement read.

“New projects may be included in the PoA when they are sufficiently advanced in their development and permitting processes and can thereby benefit from the 28-year lifetime of the PoA during which the projects may generate carbon credits for periods of either 10 or 21 years each,” Mr. Pembleton said.

RE2Grid PoA has been designed to include Philippine wind, solar photovoltaic (PV), run-of-river hydro, geothermal, wave and tidal energy projects.

“The Philippines has many projects that can be included in the RE2Grid PoA, especially wind and hydro but also some solar PV projects, as evidenced by the large number of applications for pre-development service contracts sent to the Department of Energy (DoE),” Mr. Pembleton said.

Carbonergy said the first project under its PoA is the 33.4-megawatt (MW) Bulalacao wind project that will be constructed in Mindoro in September 2014. It is expected to be completed in Jan. 2016.