Brussels, 08/06/2009 (Agence Europe) - The Kreditanstalt für Wiederaufbau (KfW) and the European Investment Bank (EIB) have signed a memorandum of understanding launching the second tranche of their joint carbon credits purchase programme. The new tranche of the programme focuses on projects in the poorest developing countries and the development of “programmatic approaches” which will enable small individual measures, such as the broad-scale use of energy-saving lamps across a region, to be combined to qualify for the programme.
The programme provides for the purchase of €100 million worth of carbon emission reduction certificates until the year 2020, in accordance with the Joint Implementation (JI) and Clean Development Mechanism (CDM) of the Kyoto Protocol. The intention is to give carbon certificate sellers an eligibility guarantee and to provide advance payment financing. The certificates will be bought primarily by European enterprises that have to meet their obligations under the European Emissions Trading System (ETS). They will be given a guarantee which ensures that, even after 2012, they will only have to buy certificates that are eligible for compliance with the ETS.
In a press release, the EIB says that due to the economic and financial crisis, “the worldwide market for carbon emission reduction certificates is currently in a very critical phase”. It says, too, that there is great uncertainty about how climate protection will be organised after 2012 when the Kyoto Protocol has expired and notes that most lenders are showing a growing risk aversion and, therefore, it is becoming increasingly difficult to finance projects in developing countries. Far fewer climate protection projects are being launched at the moment, the Bank says, and, as a result, in only a few years there might be a shortage of carbon emission certificates and price increases for European enterprises.
The EIB and KfW intend to further expand their activities in the carbon market and support its development with this programme. The first tranche of the joint programme had a volume of €88 million and aimed at enabling small and medium-sized European enterprises to better participate in the worldwide carbon market.
The activities of the KfW Carbon Fund were successfully continued in 2008. Overall, around 13.5 million carbon emission certificates were purchased last year, benefiting approximately 20 projects, mainly in the area of renewable energies and energy efficiency. In the framework of the joint EIB-KfW Carbon Programme, agreements were concluded with buyers for a total volume of €88.2 million in 2008.
The European Emissions Trading Scheme also allows the use of credits from the flexible JI and CDM under the Kyoto Protocol. JI relates to projects in the industrialised and transition countries and CDM to projects in developing countries. For further information on the joint EIB-KfW programme, go to http://www.kfw.de/carbonfund (O.L./transl.rt)