October 25, 2007 (Bloomberg) – The United Nations rejected a greenhouse-gas emissions offsetting project in Honduras that would have generated carbon-credits for Tokyo Electric Power Co., Japan’s largest power utility.Compania Azucarera Hondurena SA, the project operator, will reapply for approval from the United Nations Framework Convention on Climate Change to earn carbon-emission credits, Ryo Shimizu, a spokesman for Tokyo Electric, said today.
Under the Clean Development Mechanism, or CDM, polluters in developed nations can buy credits to offset the harmful gases they produce by investing in projects that cut greenhouse gas emissions in developing countries. Polluters are also allowed to buy credits from the project operators.
Tokyo Electric had a contract to buy credits offsetting 300,000 tons of emissions from the project for eight years through 2012.
The U.N. typically gives an approval, or a so-called certified emissions reduction credit, to a CDM applicant following the project’s endorsement by the local government.
The Honduran project operator has had to reassess the volume of gases that the venture can offset, Shimizu of Tokyo Electric said. The project was originally designed to cut as much as 33,000 tons a year of carbon dioxide.
Japan’s government approved the project in August last year, according to data from the trade ministry. The Honduran venture is designed to generate power by burning bagasse, a waste product of sugarcane processing, the ministry’s data shows.
Japan’s 10 regional power utilities this month pledged to quadruple their cumulative purchase of carbon credits to 120 million tons, helping the country to meet targets set under the 1997 Kyoto treaty. Earthquakes and mechanical faults forced Tokyo Electric and other utilities to halve some nuclear plant operations and revert to using oil- and coal-fired plants, raising their carbon output.
The government in Tokyo has approved 241 CDM projects that would provide a total of 100 million tons a year worth of carbon-emission credits, the trade ministry’s data shows.
The country’s emissions of greenhouse gases, mainly carbon dioxide, are set to increase to between 1.273 billion and 1.287 billion tons in the year starting April 2010, compared with 1.261 billion tons in 1990, according to an interim report compiled in August by a government advisory panel.
In the year ended March 31, 2006, Japan emitted 7.8 percent more of greenhouse gases than in 1990. Under the Kyoto treaty, Japan pledged to cut annual average emissions of greenhouse gases during the five years starting April 2008 by 6 percent from the 1990 level.