|
Carbon credits finance renewable energy project in Bulgaria
The EBRD, through its Netherlands Emissions Reduction Co-operation Fund, is purchasing carbon credits from a hydro power project in Bulgaria that will help significantly reduce Greenhouse Gas (GHG) emissions.
The project envisages the establishment of nine small hydro power plants along the river Iskar, about 40 km north of Sofia, with the aim to cut 336,462 tonnes of CO2 by replacing electricity generated by fossil fuels with hydro power electricity, a renewable, zero-emission source of energy. The hydro plants will be built, owned and operated by Vez Svoge, a company 90 percent owned by a subsidiary of Petrolvilla & Bortolotti, an Italian provider of energy and energy-related services, and 10 percent by the municipality of Svoge.
The carbon credit sale is in accordance with the 1997 Kyoto Protocol, an international treaty to reduce GHGs that came into force on 16 February 2005*. The Kyoto Protocol covers six GHGs, including carbon dioxide as the main contributor to worldwide GHG emissions.
Carbon credits are created when a project reduces or avoids the emission of GHGs when compared to what would have been emitted without its implementation. The Kyoto Protocol has created a market in which companies and governments that reduce GHG levels can either use such reductions for compliance or sell the ensuing carbon credits.
Jacquelin Ligot, EBRD Director for Energy Efficiency & Climate Change, said that by purchasing carbon credits from this project, the EBRD managed Netherlands Emissions Reduction Co-operation Fund is helping Bulgaria diversifying its fuel mix. The sale of carbon credits provides an additional incentive that renders such projects viable, Mr Ligot said.
The GHG emission reductions will be verified by an independent entity to ensure that the emission reductions claimed have actually been realised. The Government of Bulgaria will then transfer these credits to the account of the Netherlands. The Netherlands has agreed to cut its 1990 GHG emissions by 6%, which translates into a reduction target of 200 million tonnes by 2012.
To date, the EBRD, on behalf of the Dutch Fund, has signed three carbon credit projects in Bulgaria, which are expected to generate 1.7 m carbon credits. These projects include the switch to biomass energy at the Paper Factory Stambolijski, an energy efficiency investment programme at Svilocell and a portfolio of energy efficiency and renewable energy projects with bank UBB.
As the Dutch Fund is nearly fully invested new carbon projects in Bulgaria will be developed under the Multilateral Carbon Credit Fund (“MCCF”), a joint EBRD-EIB initiative which facilitates the purchase of carbon credits from projects across the high energy intensity countries of central and eastern Europe and the Commonwealth of Independent States. Typical projects will include industrial energy efficiency, fuel-switch, renewable energy (for example, biomass, wind and mini-hydro) and landfill gas extraction and utilisation projects.
The EBRD is the largest investor in Bulgaria with more than EUR 1.3 billion committed to projects across the country. Working with its many partners, the Bank has mobilised more than EUR 5.4 billion for projects in Bulgaria.
* The Protocol requires 36 industrialised countries and countries undergoing the process of transition to a market economy to reduce GHGs by at least 5 percent below 1990 levels between 2008 and 2012.
|
