Centrica plc today announced that it has secured access to carbon credits from China, in its first deal with carbon brokers Climate Change Capital.
The carbon credits will be produced by a project which will help reduce the level of greenhouse gases in China. China is the world’s second biggest emitter of greenhouse gases and a signatory to the Kyoto protocol, but as a developing country, is not subject to limits on its own emissions.
Under the agreement, Centrica, as a member of a syndicate, purchases Certified Emission Reduction (CER) certificates, which can then be used for compliance with the EU Emissions Trading Scheme under rules designed to recognise the global nature of climate change by linking the EU ETS to the global carbon market.
As part of its low carbon strategy, Centrica has also committed to a minority investment in a carbon fund managed by Climate Change Capital to purchase further carbon credits. CCC is identifying similar projects in developing countries which, under the Clean Development Mechanism (CDM) of the Kyoto Protocol, then will sell the credits generated to governments or companies in other countries. These organisations can use them for complying with their respective Kyoto targets, with the EU ETS, or can sell them on in the growing global carbon market.
Sue Wheeler, Centrica’s head of new energy, said: “Centrica believes project credits like these are a vital step towards global engagement in reducing carbon emissions. Projects developed under the Clean Development Mechanism deliver real and enduring carbon emissions reductions and, in the absence of legally binding targets, open a pathway to Kyoto for many developing countries.”
Allowing the use of credits for compliance under the EU ETS supports these projects, supports innovation in UK business, and allows reductions to be made at lowest cost to the global economy, a key element in helping develop a low carbon environment.