ABU DHABI // Masdar, the Government-owned clean energy company, is resubmitting four of six schemes to earn carbon credits, UN records show. Masdar officials said the applications were being resubmitted because of a change of scope by ADNOC. Masdar had agreed to obtain the credits and sell them on behalf of ADNOC, taking a sliver of the profit for itself in a business model it hopes to replicate across the region.
Sam Nader, the director of Masdar's Carbon Management Unit, said the company had already registered three projects with the UN Framework Convention on Climate Change, which would begin to earn credits as early as next June. "Masdar is extremely interested in playing a major role in carbon reductions and monetisation," Mr Nader said. Documents from the UN Environment Programme show that the four resubmitted applications all relate to plans at Abu Dhabi National Oil Company (ADNOC) to install technology to capture extra natural gas from oil and gas operations and re-route it for use in the firm's power stations.
The four projects would have earned a combined 291,000 credits, one for each tonne of greenhouse emissions they prevented from going into the atmosphere. As of yesterday, those credits would have been valued at about 3.9 million (Dh21.4m) a year based on European credits trading.
To obtain UN certification for carbon credits, applicants spend more than US$300,000 (Dh1.1m) for each project and undergo about nine months of tests, audits and documentation, said Shezan Amiji, the managing director of the environmental consultancy EcoVentures. "If you have to start again, you basically waste a year," Mr Amiji said. "It can really slow you down." ADNOC has proved to be a stumbling block in a separate Masdar project to capture carbon emissions from four industrial sites across the emirate and sell it to the oil company for permanent burial in old oil wells.
ADNOC officials said they needed more time to study the effects carbon gas would have on the geology of its oil wells. Another challenge for Masdar concerns the future of the carbon credit market itself. The Kyoto treaty that led to their creation is expiring in 2012 and the fate of the so-called Clean Development Mechanism is now in the hands of negotiators, who are gathering in Copenhagen in December to work on a new treaty to deal with global warming.
The system works by allowing firms in developing countries to earn Certified Emissions Reductions through the UN for each tonne of carbon they keep out of the atmosphere. The credits are sold to utilities and others in industrialised countries that need to offset their emissions to get under the limits set by the Kyoto treaty on global warming. Several developing nations, including China, India and Brazil, make hundreds of millions of dollars a year on carbon credits, but they have been slow to take off in the Middle East.