Thursday, February 28, 2008

India: Costly coal to singe carbon credit trading

Ecology 101: Everything is connected.
From the Times of India:

Punters on carbon credits have a new reason to worry: the rapid increase in global coal prices. For carbon credit sellers such as India, life is good when companies in Europe burn dirty fuel and buy carbon credits from them to clean up the mess. However, that could well change if coal becomes too expensive.

The use of coal in Europe is important to maintain the head of steam under carbon credit prices. Power utilities in Europe, for instance, are major buyers of certified emission reduction (CER) because they use coal, which was till now the cheapest fuel.

The emission factor for coal-fired generation in Europe is about 0.9 tonnes of CO2 per MWh, nearly double the factor for gas-fired generation. So, utilities wanting to burn coal need about twice as many European Union Allowances (EUA) as they do for natural gas under the 27-nation bloc’s plan to limit carbon-dioxide emissions.