SCA is participating in five Clean Development Mechanism (CDM) projects in India. The aim is to reduce greenhouse gas emissions by increasing the usage of bio fuels in developing countries outside the Kyoto Protocol.
SCA participates in five CDM projects in India.
SCA’s present CDM projects are part of the European Union’s Emissions Trading Scheme (EU ETS) for trading with greenhouse gas emission rights. The scheme is EU’s system aiming at fulfilling the goals of the Kyoto Protocol.
EU ETS started in January 2005 and its first phase will finish by the end of 2007. The second phase of the scheme starts in January next year and banking of EU emission rights between the first and second phase is not allowed. CDM projects are however resulting in emission rights which can be used in both phases of the scheme.
Since SCA has managed to emit less than it was allowed to, the company has had a surplus of emission rights. SCA has then chosen to swap some of the surplus to CDM projects, for economical and environmental reasons, instead of selling them to someone, which could have been an option.
“To connect the ETS to environmental and energy projects in developing countries in this way requires a severe control function and a methodical verification system for measuring the actual reduction of emissions," says Patrik Isaksson, Vice President Environmental Affairs, at SCA’s head office in Stockholm.
"With that in place this is a good way to enable investments in regions were they have the biggest positive impact.”
According to Per-Erik Eriksson, Vice President Energy at SCA’s head office in Stockholm, participating in CDM projects is also a good tactical way for SCA to enter the second phase of the scheme.
“We are expecting that the second phase will mean that the amount of emissions allowed by the system will be reduced. By swapping part of our surplus of EU emission rights to CERs (CDM projects result in CERs) we will be able to move some of our extra emission rights from the first phase to the second, which is good for everyone involved in this,” says Per-Erik.
SCA’s CDM projects are run through a partnership with the Swedish company ‘Tricorona’ that handles the projects and all practical issues in India and with the United Nations.
All CDM projects are controlled by the ‘United Nations Framework Convention on Climate Change’ (UNFCCC) to which the Kyoto Protocol is connected.