British SSE buys 2 million CO2 credits from China

CHINA WATCH

This is the second largest carbon deal in China this year, trading a total amount of two million carbon emission credits:

GD Power Development Co Ltd, a subsidiary of China Guodian Corporation, one of China’s major energy companies has signed agreements with Scottish and Southern Energy plc (“SSE”) to develop the four new wind farms in northeast China.

SE Energy Supply will purchase around two million Carbon Emissions Reduction Certificates (CERs) for five years starting from 2008, according to SSE’s press release yesterday.

China’s largest carbon credit trade was with France earlier this year, as Greenbang reported that France has bought 3.6 million tons of carbon dioxide discharge capacity from China.

The price of one ton of carbon emittion is $11, much cheaper compared to $20 or $30 in the European market, that’s why foreign companies and organizations trade carbon with China, Doctor Shen Yiyang from the United Nations Development Programme said, cited by Hexun Website.

Under the Clean Development Mechanism (CDM) established under Article 12 of the Kyoto Protocol, countries – and therefore companies – can meet their carbon emission reduction targets by purchasing CERS from CDM-approved carbon reduction projects in the developing world. This is the first time that SSE has directly acquired primary CERs from a project.

Each of the four wind farms is expected to have an installed capacity of around 50MW and will displace carbon emissions from coal-fired power stations in the region, leading to around two million tonnes of carbon dioxide being avoided. The construction of the first of the wind farms, GD Xingcheng Haibin is already under way and the last of them is expected to be commissioned during 2008.