Sweden to buy 500,000 cookstove CO2 credits

by Susanna Twidale | Reuters Point Carbon
Wednesday, 9 October 2013 08:19 GMT

Women sit by their cooking stoves in the sprawling Kibera slums of Kenya's capital Nairobi, June 8, 2009. REUTERS/Noor Khamis

Image Caption and Rights Information

LONDON, Oct 9 (Reuters Point Carbon) – Sweden will buy 500,000 U.N.-backed carbon offsets from a clean cookstove project in Ghana over the next three-to-four years, the developer of the scheme said late Tuesday.

Sweden’s Energy Agency will pay for the credits once they have been issued by the U.N., said Tom Morton, director of Climate Care, adding that the company will apply to the U.N. for the Certified Emission Reductions (CERs) in the first quarter of next year.

“Sweden wants to support projects that have real community benefits as well as reducing CO2,” he said.

He would not reveal the exact price of the deal but said Sweden will pay more than the current price for CER credits on the secondary market.

The value of exchange-traded CERs has sunk to around 60 cents from over 20 euros five years ago, after countries failed to agree a global climate pact that would have spurred demand.

But developers of cookstove projects say their permits command a premium because the projects also help curb air pollution and reduce health risks, while helping poor households cut their cooking fuel bills.

Some 8 million tonnes of offsets generated by clean cookstoves were sold to compliance buyers at an average price of $9.30 each in 2012, according to a report commissioned at the end of September by the Global Alliance for Clean Cookstoves.

Under the Ghanaian scheme, Climate Care and its partner BioCarbon, which lists Macquarie Bank and the International Finance Corporation as shareholders, will install around 35,000 stoves in households in the country, Morton said.

CREDIT BUYER

Sweden has bought 19 million U.N.-backed carbon credits since 2002, and said earlier this year it plans to purchase another 21 million by the end of the decade.

“The Swedish government is committed to purchasing CERs from projects that have measurable outcomes for their host communities and where a fair carbon price is central to the project’s success,” Christian Sommer from the Swedish Energy Agency said in a press release on Wednesday.

Sweden’s comments mark a growing trend among governments.

Norway, earlier this year said it would only buy credits from projects dependent on carbon finance, ruling out wind and hydro schemes.

Sweden outpaced its emission reduction targets under the 2008-2012 first commitment phase of the Kyoto Protocol, but plans to use the offsets towards a self-imposed goal to cut emissions from transport, agriculture and buildings by 40 percent under 1990 levels by 2020.

Our Standards: The Thomson Reuters Trust Principles.