Finland buys Certified Emission Reductions from small hydro project in China
Press release 272/2007
5 December 2007
Finland has signed an Emission Reductions Purchase Agreement (ERPA) with a Chinese company regarding the purchase and transfer of Certified Emission Reductions (CERs) generated by a small-scale hydroelectric project under the Kyoto Protocol's Clean Development Mechanism (CDM). Finland intends to use these CERs to help meet its Kyoto target of stabilising national emissions to the 1990 level during the first commitment period 2008-2012. Mr. Ilkka Kanerva, Minister for Foreign Affairs, signed the contract on behalf of the Ministry for Foreign Affairs of Finland. Chinese company Yongchang Dongfang Hydropower Development acts as the local project developer.
The Dagan'gou small-scale hydroelectric project (8.4 MW) is located in Yongchang County, in China's north-western province of Gansu. The project was commissioned in May 2007, and it generates clean, sustainable electricity to the local grid and increases the reliability of electricity supply. The project will reduce global greenhouse gas emissions by replacing fossil fuel based electricity production and avoiding the associated emissions that would have occurred in the absence of the project. In addition, the project offers full-time employment opportunities for local people.
According to the agreement, Finland will purchase approximately 113 175 CERs generated by the project over the period 2008-2018.
Finland as a buyer of carbon credits
According to the National Energy and Climate Strategy of 2005, Finland aims to acquire ten million tonnes of carbon dioxide equivalent during 2008-2012 through the Kyoto mechanisms. The Dagan'gou project is the eleventh project with which Finland has signed a purchase agreement. In total, Finland has contracted approximately 1,5 million tonnes of carbon dioxide equivalent from these eleven projects.
The Finnish Environment Institute (SYKE) is responsible for the practical implementation of the Finnish Carbon Procurement Programme (Finnder). The Finnder Programme is actively seeking to acquire emission reductions from further CDM and JI projects for Finland.
The Clean Development Mechanism
The Kyoto Protocol contains three market-based flexible mechanisms, namely the Clean Development Mechanism, Joint Implementation (JI) and International Emissions Trading (IET). The Clean Development Mechanism is a mechanism under which an industrial country committed to an emission reduction goal prescribed by the Kyoto Protocol implements a project in a developing country that is not bound by such a commitment. The purpose of the mechanism is to promote sustainable development in developing countries while providing industrial countries with cost-effective ways of reducing emissions. Emissions credits acquired through CDM projects are intended to supplement domestic measures taken by each country to reduce emissions.
In a typical situation, projects concern the areas of renewable energy, energy efficiency and waste management. The Clean Development Mechanism provides a tangible tool for cooperation with the developing countries in the area of energy and climate politics. The projects are expected to promote the transfer of technology, to attract investments to developing countries and increase the share of climate- friendly methods of energy production.
For further information: Director Tiina Jortikka-Laitinen, Ministry for Foreign Affairs, tel. +358 40 7408 945, Project Assistant Elina Ruoho, Ministry för Foreign Affairs, tel. +358 9 1605 6191, Project Manager, Juha Seppälä, Finnish Environment Institute, tel. +358 400 284 254, Project Assistant Anna Laine, Finnish Environment Institute, tel. +358 400 148 800