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Spain's Endesa leads CO2 offsetters in 2008-report

* Endesa offset 25 pct of its 2008 emissions, says Sandbag

* Steelmaker ThyssenKrupp leads EU industrial co. offsetting

* 98 pct of CERs retired in EU in 2008 came from 5 countries

* Lucrative industrial gas CERs were 84 pct of surrendered

LONDON, March 12 (Reuters) - Spanish utility Endesa ELE.MC, 92 percent owned by Italy's Enel ENEI.MI, offset one quarter of its 2008 greenhouse gas emissions instead of investing in reducing them at home, a report said on Friday.

Endesa led all European Union industry in outsourcing carbon emissions cuts to developing nations in 2008, surrendering 11.2 million tonnes of Kyoto Protocol carbon offsets it had purchased, said the report by green group Sandbag.

Under Kyoto’s Clean Development Mechanism (CDM), firms can invest in cheaper emissions cuts in countries like China and India, and get offsets which can be used to meet part of their targets under the EU’s Emissions Trading Scheme.

The offsets, called Certified Emissions Reductions (CERs), can also be bought on the open market and currently trade around 12 euros ($16.28) per tonne of carbon dioxide CEREZc1.

Steelmaker ThyssenKrupp AG TKAG.DE retired the most CERs of any non-utility, turning in nearly 6 million, equivalent to 30 percent of its 2008 emissions. Its plant in Duisberg, Germany offset 56 percent or 5 million tonnes of its CO2 in 2008, the last year of complete data available, Sandbag said.

Most industrial firms like ThyssenKrupp receive for free extra EU permits annually to help them compete internationally.


Critics have voiced concern that many CDM projects would have gone ahead regardless of the scheme, meaning any CERs sold are essentially pumping extra emissions into the atmosphere.

Furthermore, only a handful of the most advanced emerging economies are benefiting from the majority of CER revenues.

Sandbag said 98 percent of the CERs retired in the EU scheme in 2008 originated from five countries: China and India originated 41 percent and 31 percent of those surrendered, while 15 percent came from South Korea, 8 percent came from Brazil and 3 percent came from Mexico.

“We recommend that the EU improve the distribution of countries hosting projects to minimise competitive distortions, to ensure least developed countries receive more investment,” Sandbag said.

The CDM’s executive said last month it would waive registration fees for projects in the least developed countries.

Industrial gas CERs, generated by projects that capture potent greenhouse gases like hydrofluorocarbons (HFCs) and nitrous oxide (N2O), made up the majority of those retired in 2008 at 68.4 million tonnes or 84 percent of the total.

Critics often pan industrial gas CERs, saying they are excessively lucrative and dominate the CDM, while supporters argue that they are the easiest and cheapest way of significantly cutting greenhouse gas emissions.

With 31.3 million tonnes or 94 percent of its total CERs exported, China led all nations in originating HFC and N2O CERs.

Projects that trap greenhouse gas emissions, for example from leaky gas pipelines, accounted for 7 percent of retired CERs while renewable energy and biomass projects, collectively made up just 3.7 percent. *For more details from the Sandbag report, click [ID:LDE6291LN] and for a table of issued CERs, click [ID:nLDE61E15M] (Reporting by Michael Szabo; Editing by Keiron Henderson)