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Factbox: U.N. panel to rule on green incentives for coal

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Thu Sep 16, 2010 2:44pm EDT

(Reuters) - A U.N. panel will rule on Friday for the first time on whether a coal plant should qualify for carbon offsets under a Kyoto Protocol scheme, already criticized for favoring large, industrial projects.

Coal is the most carbon-emitting form of power generation, but project developers, India's Adani Group, say that their 1.3 gigawatt, super-critical coal plant is more efficient than most.

The U.N.'s clean development mechanism allows countries and companies in the developed world to meet carbon emissions limits by paying for carbon offsets generated by emissions-cutting projects in the developing world.

A 10-member panel of U.N. experts oversees that scheme, deciding which projects should qualify. The scheme has long been criticized for being heavily biased toward large industrial projects which destroy the potent greenhouse gas HFC-23.

Such HFC projects account for about half all carbon offsets issued by the U.N. CDM executive board (EB) so far. The project developers earn far more money under the scheme than it costs them to destroy the greenhouse gas.

The scheme has also come under fire for rewarding wind and hydropower projects in China which some critics say already already make a good financial return, and so would have been built anyway.

The EB will decide at the meeting which concludes on Friday:

* whether to register certain projects, thereby allowing them to claim carbon offsets under the CDM. Such projects under review include: a 340 MW gas plant in northwest India; a 1,170 MW gas plant in China; a 10 MW gas plant in Pakistan; a 1,320 MW super-critical coal plant in India; nine biomass-fired power plants; 23 hydropower plants; 22 wind farms;

* whether an existing, registered project should be allowed a new, seven-year period of carbon crediting. The project under review is a HFC project in South Korea.

* a draft procedure to force consultants, also called designated operational entities (DoEs) and who advise on CDM projects, to buy back excess carbon offsets in cases where the EB finds the developers claimed too many. The EB was given the power to implement such procedures at a U.N. meeting in Canada in 2005

* whether any DoEs have broken rules to the extent that they should be suspended
Environment
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Comments (2)
meleze wrote:
It is a pity that USA are not considered as equal as a developping country. USA are one of the biggest coal miner of the world. According M.Chu they should going to open a coal in Virginia plant like that one of Adani but they are not allowed to benefit of a carbon ofsetting credit given their to stay outside of the Kyuoto Protocol.

Sep 16, 2010 5:42pm EDT  --  Report as abuse
CDMWatch wrote:
The UN has already ruled for the first time that a coal plant can qualify for carbon offsets under the CDM when registering two 660 MW units of Adani’s Power Maharashtra Ltd in December 2009. Now, Adani is applying with a second project based in Tirora, India. However, contrary to what the article above says, the rejection/registration of the project is not at this week’s CDM Executive Board’s agenda. But fortunately some members have shown doubts about its additionality and will therefore decide whether to scrutinize the project as part of the registration procedure, a first step towards rejecting it at their next meeting in October.

On the positive side and hardly covered by media, the UN has taken a milestone decision against coal projects in the CDM at the last CDM Executive Board meeting in July, which saw the first rejection of the Indian Ultra Mega Power Project (UMPP) Tata Mundra.

While not being decided at this meeting, the Tirora decision remains important as the clearest example thus far of a non-additional plant, Reliance Power Limited’s 3,960 MW Sasan UMPP in Madhya Pradesh has just applied for registration.

These types of CDM projects are not additional as they would be built anyway and would result in millions of fake carbon credits flooding the market. Moreover, fossil fuel-based projects place a black mark on the environmental integrity of the CDM- something the United Nations can ill afford at this time.

Sep 17, 2010 8:37am EDT  --  Report as abuse
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