The KfW Carbon Fund now has a total of €80mn available for purchasing emission credits. This is substantially higher than the originally planned amount of €50mn. More than 20 enterprises have now paid into the fund, thus using the opportunity to purchase low-cost emission credits from projects in developing and industrialised countries in order to meet their obligations in the context of the European emissions trading system.
Three-quarters of the companies participating in the fund are German, the remainder comes from Austria, Luxemburg and France. The majority are power generating companies, but chemical and cement companies also participate in the KfW Carbon Fund as do banks, which purchase certificates for their clients.
“This successful result shows that the concept of the KfW Carbon Fund has been well received and that the fund was set up at the right point in time in order to give companies access to this new and very demanding market of flexible Kyoto mechanisms,” says Detlef Leinberger, member of the board of managing directors of KfW Bankengruppe. KfW itself contributes €10mn to the Carbon Fund.
Meanwhile the KfW Carbon Fund has concluded the first purchase agreement for emission credits. The underlying project is an industrial gas project in India. Further projects in the total volume of more than 30mn tonnes of CO2 covering the period until 2012 are in preparation.
Leinberger also pointed out that interested companies are still invited to contact KfW. The purchase programme will be continued further. The second tranche of the KfW Carbon Fund is being prepared.
The Carbon Fund was set up by KfW Bankengruppe in cooperation with the German federal government at the end of June 2004. The fund has been designed for companies that want to use emission credits from projects in the context of the European emission trading to be started in 2005 but do not want to commit themselves abroad.
From January 1, 2005, Europe-wide trade in CO2 certificates has been possible. Under this European trading system, certificates issued in accordance with the flexible Kyoto mechanisms JI and CDM are to be recognised as well. Joint implementation (JI) refers to projects in the industrialised and transition countries and clean development mechanism (CDM) to projects in developing countries. Emission certificates acquired through these projects can then be traded for EU emission rights.