Germany earmarks EUA revenue for emissions projects

www.carbon-financeonline.com/
25 June, 2008

The German government will this year invest €400 million ($623.2 million) from sales of EU allowances (EUAs) in a programme aimed at reducing greenhouse gas (GHG) emissions and protecting the climate, said Sigmar Gabriel, Germany's environment minister, last week. Small businesses, private households, cities, counties and local amenities will be able to apply for a share of the €400 million to fund small-scale emission reduction projects, said the government. The fund will be split with €280 million set aside for national projects and €120 million for international projects.

The government said it wanted to support projects in developing countries that will help provide a sustainable energy supply and those working to protect biodiversity at risk from climate change. A spokesman said "it's too soon to give details" about whether these projects will generate carbon credits. Domestic projects wanting a share of the €280 million will have to put forward a plan of action and nominate a "climate protection manager" to oversee the programme, which can last a maximum of three years.

The government said projects such as the replacement of lighting in a public building with energy efficient technology will be supported. It will also look favourably on biomass projects and the installation of small combined heat and power systems. "The climate protection initiative provides an important contribution in reaching our climate target," said Gabriel. Germany wants to reduce GHG emissions by 40% by 2020 compared to 1990.

"It will give us the potential to reduce CO2 [carbon dioxide] emissions across the board, in schools, businesses and private households," he added. "We want to show that protecting the climate makes financial sense... Whoever invests today will be rewarded with lower energy costs in the future." Germany expects that part of the revenue from EUA auctions will be put to similar use in future years. The government is auctioning 40 million EUAs each year over 2008-12.