Czech Republic gears up for more AAU sales (Argus)

The Czech government is looking to conclude four more assigned amount unit (AAU) deals in coming weeks, the country's environment ministry said today. The news follows the signing of a 20mn t CO₂ equivalent (CO_2e) deal with Japanese firm Mitsui yesterday.

“We hope that we will sign all four deals in 5-6 weeks,” a spokesman from the Czech environment ministry told Argus, citing two deals with Spain and Austria, one deal with the World Bank and another deal with a private-sector Japanese institution. He was unable to comment on the size of the deals, but confirmed that the Czech Republic has 40mn t CO2e of AAUs left to sell. “Of course, we are negotiating with other parties, but these negotiations are in the early stages,” he said.

The Czech Republic has sold 60mn t CO_2e of allowances. Japan purchased 40mn t CO_2e of the country's AAUs in March last year and the remaining 20mn t CO_2e were sold yesterday in an agreement that concluded almost a year of negotiations with Mitsui. The Czech Republic is reserving 50mn t CO_2e of allowances to cover emissions from new installations.

The country plans to “green” all its AAUs, a process that involves attaching a green investment scheme to the sale of the allowances. Proceeds from the sale will be used to reduce emissions from a specific project in the seller's country. “The fact remains that, for 2009, we are counting on the green light for a savings programme with at least 10bn koruna available for use,” environment minister Ladislav Miko said yesterday.

Like most post-communist economies, the Czech Republic reduced its greenhouse gas emissions significantly when the former Soviet Union collapsed. This left it with surplus allowances, as the Kyoto protocol measures emissions against a 1990 baseline.

Fiona Riches, Argus, 1. 10. 2009