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More Tradeable Carbon Credits On Offer

July 21, 2004

The Govt is offering more than $60m worth of new carbon credits to businesses able to help reduce NZ’s greenhouse emissions during the first stage of the Kyoto Protocol from 2008 to 2012. Renewable electricity generation projects are likely to be strong contenders for the new round of 6m emissions units, which go up for tender in late August. But Climate Change Minister Pete Hodgson says the net is being cast wider than in the first round of 4m units last year, making it easier for sectors such as agriculture, forestry and transport to get a share.

The units are awarded only to projects which would not otherwise be commercially-viable. Credits are tradeable on the international market and an indication of their value was established last December when Meridian Energy’s Te Apiti wind farm - one of two early projects the Govt supported - sold its emission units to the Netherlands Govt for an average of $10.50 each. This was the first international sale of NZ emission units.

Hodgson says the first tender round gave priority to electricity generating projects and those delivering reductions in emissions prior to 2008. In the second round these criteria have been removed. But he predicts electricity generation projects are likely to be front-runners again, including wind farms, gas and bio-energy co-generation plants, geothermal generation, hydro schemes and electricity generation from landfill gas.

Projects must provide a minimum reduction in emissions of 10,000 tonnes of CO2-equivalent in the first Kyoto commitment period. Projects that won credits in the first tender round include:
-     Esk Hydro Power Ltd in Hawkes Bay - 12,000 units for a mini-hydro project.
-     Palmerston North City Council - 149,006 units for its Awapuni landfill project.
-     Auckland’s Watercare Services Limited - 10,829 units for a series of mini hydro projects.

The tender round runs from late August to mid October, with awards announced
in December. Tender documents are on the Climate Change Office website - www.climatechange.govt.nz

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