OAO Irkutskenergo earns revenue from selling carbon emission reduction units (ERU) under the Kyoto protocol for the first time
It is the first time that OAO Irkutskenergo has earned revenue from selling carbon emission reduction units (ERU) under the Kyoto protocol. The company has earned over RUB 150 mln.
The company had obtained ERUs thanks to the implementation of the “Increasing the Efficiency of the Use of Water at the Bratskaya HPP” project. The project involved replacing six rotor wheels of hydroelectric units at the Bratskaya HPP. Currently, Irktuskenergo is one of the Russian leaders in terms of the total amount of ERUs obtained from implemented projects. Cash generated from the sale of ERUs was as allocated for repaying a new tranche under the agreement on purchasing another six rotor wheels for hydroelectric units at the Bratskaya HPP. This is a fine example of meeting the national requirements for reinvesting money in projects allowing to reduce the negative environmental impact. In 2012-2013, OAO Irktuskenergo expects to sell ERUs obtained from other projects worth over EUR 10 mln.
Evgeny Fedorov, CEO of EuroSibEnergo: “Irktuskenergo’s project under the Kyoto protocol is unique; it is one of the first Russian hydropower generation projects of this kind. Not only have we gained a valuable experience winning the necessary national and international selection process, but we have also demonstrated the economic feasibility of environmental projects.”
Reference: At the Earth Summit held in Rio de Janeiro in 1992, the UN Framework Convention on Climate Change (UN FCCC) was adopted. It was signed by over 180 countries, including Russia. The main goal of the FCCC is to counter changes in the atmosphere and to keep them at a safe level. The FCCC does not stipulate target quantities; thus, the Kyoto protocol (an additional document adopted in the City of Kyoto (Japan) in December 1997) was developed to determine them. The countries which signed the protocol set the targets for limiting or reducing emissions between January 1, 2008 and December 31, 2012. The limitations are aimed at reducing the total average emission of six types of gas (CO2, CH4, hydrofluorocarbons, perfluorocarbons, N2O, SF6) by 5.2% as comparfed with 1990 during this period. Industrial countries, including Russia, took on the main obligations. To measure the carbon units transferred, a ton of CO2 equivalent is used; it is multiplied by a certain coefficient for each greenhouse gas according to its global warming potential. The Protocol was the first global environmental agreement on a market-based approach to environmental protection involving international emissions trading. In other words, if a country that ratified the protocol reduces its greenhouse emissions below the level specified by the Protocol, it can sell the so-called emission reduction units (ERUs, equivalent to one ton of CO2) to those who exceed their limits.
Press service of OAO Irkutskenergo
October 25, 2012