* 40 mln tonne deal to follow 30 mln tonne pact with
Ukraine
* Unit price in Czech deal almost same as Ukraine deal
* Tokyo nears target for planned offset purchases from
abroad
(Adds more details)
By Takeshi Yoshiike and Risa Maeda
TOKYO, March 25 (Reuters) - Japan is set to seal a deal
with the Czech Republic next week to buy 40 million tonnes of
emissions rights from the east European country via a
government-to-government trading scheme under the Kyoto
Protocol, a government source familiar with the deal said on
Wednesday.
The deal would help Tokyo to near its target to buy 100
million tonnes of offsets from abroad over the five-year Kyoto
period to supplement Japan's domestic efforts to cut greenhouse
gas emissions.
Japan signed its first such deal last week, agreeing to buy
30 million tonnes of emissions rights from Ukraine.
[]
Japan will pay about 50 billion yen ($512 million) to the
Czech Republic, the source told Reuters in a telephone
interview, adding that the price per tonne was almost the same
as that of its deal with Ukraine.
Asked if the value for the Czech deal was about 50 billion
yen, the source said: "It's somewhere around that level ... The
(unit) price was about the same as that in the deal with
Ukraine."
In the two years through March 2008, the Japanese
government had made contracts to buy 23.1 million tonnes from
abroad, all of which are certified emission reductions (CERs),
or offsets generated by clean-energy projects in developing
countries under Kyoto's Clean Development Mechanism scheme.
The Czech Republic is set to deliver half of the 40 million
tonnes of so-called Assigned Amount Units (AAUs) in the
Japanese fiscal year to March 2010 and the other half the
following year, the source said.
Tokyo said on Tuesday it had signed with Prague a guideline
on how the eastern European country will use the proceeds from
its AAU sale, which included capacity building for environment
technology transfer from Japan to the Czech Republic.
PURCHASE FROM ABROAD
Under Kyoto, all 37 industrialised countries that have
committed to meet emissions curbs issue emissions credits
called AAUs, which can be traded to other governments.
The number of AAUs are calculated with reference to a
nation's emissions against Kyoto's 1990 baseline year. Each AAU
represents a tonne of CO2-equivalent.
Many former Soviet bloc countries have an excess of AAUs
after an industrial collapse in the 1990s and some have been
selling these to nations well above their Kyoto targets to help
them meet their emissions reduction obligations.
AAUs are often cheaper than European Union emissions
permits <CFI2Z9>, seen as the market's benchmark, as critics
say there is a lack of accountability and transparency over
whether the proceeds are spent in ways to cut greenhouse gas
emissions.
Despite Tokyo's steady buying of offsets from abroad, there
is speculation that emission cuts in Japan may prove
insufficient, resulting in additional buying from abroad toward
the end of the Kyoto period.
Also, the Japanese government may have to buy more if
actual delivery of CERs falls short of initially plans.
Japan, the world's fifth-biggest emitter, saw emissions
rise to a record 1.37 billion tonnes in the year to March 2008
due partly to a halt of its biggest nuclear power plant after a
July 2007 earthquake.
Japan's Kyoto commitments are to cut emissions to 1.19
billion tonnes on average in the five years to March 2013.
($1=97.72 Yen)
(Editing by Michael Urquhart)
