* Some power firms bought AAUs last year - traders
* Several say they keep buying Kyoto credits
(Adds comments and details)
By Risa Maeda
TOKYO, May 21 (Reuters) - Japan's 10 power companies spent
23 percent less on carbon credits last financial year due to a
fall in market prices and also because some firms tapped a less
costly type of credit from East European countries.
A Reuters poll of the 10 power companies showed they paid a
total of 77 billion yen ($861.5 million) for carbon credits in
the year to March 2010 to achieve their self-imposed targets to
help Japan meet its greenhouse gas reduction commitments under
the Kyoto Protocol. [] []
The spending was down from 100.1 billion yen that the
companies, including Asia's biggest utility Tokyo Electric Power
Co (TEPCO) <9501.T>, booked as costs for carbon credits in their
earnings in 2008/2009. []
The power sector is one of the world's biggest buyers of
carbon credits from abroad and is expected to buy more as it
struggles to meet self-imposed targets.
The targets are based on a model in which low-carbon nuclear
plants run at 80 percent or more of their capacity. The rate on
average was 66 percent in 2009/2010.
The 10 companies did not reveal the number or the types of
Kyoto carbon credits they bought for the 77 billion yen.
KEEP BUYING CREDITS
Carbon traders said some power firms widened their scope
last year from focusing on investing in clean-energy projects in
developing countries which generate Kyoto carbon credits, called
Certified Emission Reductions (CERs).
"Power companies bought AAUs last year at 8-9 euros ($10)
per tonne, less than the price of CERs," said a Tokyo-based
carbon trader, referring to sovereign emissions credits, called
Assigned Amount Units (AAUs).
East European countries can sell these credits to developed
countries bound by the Kyoto Protocol, including Japan.
"Primary CERs are slow to deliver, so some have shifted
their attention to AAUs," the trader said.
CERs <CEREZc1> on Friday traded at around 12 euros a tonne.
Official data showed that Japan received a total 81.0
million AAUs in 2009, up from 16.6 million a year earlier.
The Japanese government said it received 41.5 million AAUs
last year. Companies in Japan therefore received the remaining
39.5 million, including credits from the Czech Republic, Ukraine
and Poland, traders said.
Each of the 10 power firms has committed to emit 20 percent
less CO2 per kilowatt hour than 1990 levels over a five-year
period to March 2013.
Even though their targets are voluntary, all power firms in
Japan have said that if their efforts to make low-carbon
electricity are insufficient they will buy carbon offsets from
abroad as the Kyoto Protocol allows.
Several power companies said that they would keep buying
Kyoto carbon credits in coming years.
"We won't comment on how much more. But we'd like to keep
buying CO2 credits as they are cost efficient (relative to other
CO2-cutting measures)," said a spokesman at Chubu Electric Power
Co <9502.T>, Japan's third largest power company.
But Kyushu Electric Power Co <9508.T> may be among few
companies reluctant to buy more. Japan's fifth-biggest power
company met its CO2 intensity target in 2008/2009 and is set to
meet the target in 2009/2010. []
For a related FACTBOX, please see []
($1=89.38 Yen)
(Editing by Nina Chestney and Anthony Barker)
