German federal agency aids carbon trading with India


Frankfurt : German aid agency disclosed Tuesday it was helping Indian energy companies to market valuable pollution rights to companies in the West.

Support TwoCircles

RWE Power AG, part of Germany’s second biggest utility, had been the first buyer, said GTZ, an aid operator fully owned by the federal government in Berlin.

The carbon-dioxide-emission rights are being traded through a New Delhi office of GTZ.

Markus Kurdziel, head of the project, said at GTZ offices near Frankfurt that RWE had contracted for up to 90 million units till 2012, mostly from India, to meet its obligation to reduce emissions blamed for climate change.

“It’s a simple mechanism,” he said. “If RWE is obliged to reduce the CO2 emissions from one of its lignite-burning power stations in Germany, it can instead buy pollution rights from a new hydro-electric dam in India.”

Currently India generates 80 per cent of its electricity from coal, so the builders of renewable energy plants are entitled to emissions credits for every kilowatt-hour of power they produce, Kurdziel said.

The outcome benefits all parties: RWE can keep on running its power stations in Germany as before, the Indian operator gains an extra source of finance for emissions-free power, and global emissions are cut.

Carbon rights trading was introduced under the Kyoto Protocols on Climate Change.

The trading system in Europe allows swaps of rights with emerging and poor nations, with RWE and other companies allowed to perform up to 20 per cent of their reductions by proxy abroad, he said.