Russia is expected to become a significant new source of offset credits in the coming years. After several years of delays it began approving projects to earn ERUs last year.
SBB 21 January Four Russian steel producers are among the 18 projects recently approved by the Russian Ministry for Economic Development to earn carbon credits from the Joint Implementation (JI) programme, Steel Business Briefing learns.
Once approved, the projects are now eligible to receive Emissions Reduction Units (ERUs) which can be sold or traded on an exchange. For a reduction in greenhouse gas emissions equivalent to one tonne of carbon dioxide the project would receive one ERU with a current market value of €11.1/t ($14.93/t) on London’s European Climate Exchange. ERUs can be bought by European industrial facilities and used to meet their obligations under the Emissions trading System.
The four steel projects are all in the five biggest projects on the list and together could earn up to 13.7m ERUs. By far the largest was MMK’s 2004-2006 project to replace its open hearth furnaces with EAFs, which the company expects to save 7m t of CO2 emissions and therefore earn 7m ERUs.
NLMK, TMK and Asha Iron & Steel have also had projects approved and could earn 2-2.5m credits each.
This is the second group of Russian JI projects to be approved so far. JI is a mechanism under the UN Framework Convention on Climate Change by which investors in Annex I countries, including Russia and Ukraine, can earn carbon credits by investing in reducing greenhouse gas emissions.
Amurmetal, Chelpipe Kosaya-Gora Steelworks and Air Liquide-Severstal had also entered projects, but these did not receive approval this time around.