Government Subsidizes Private Emission Credit Project

The Japanese government has launched a program to subsidize private businesses that aim to reduce carbon dioxide (CO2) emissions through the Kyoto Mechanisms, mainly the Clean Development Mechanism (CDM) and Joint Implementation (JI). Public applications for the FY 2004 subsidy were accepted during July and August 2004.

Successful applicants for the subsidy program were chosen from companies whose CO2 reduction projects overseas were assessed as highly viable and cost-effective based on CDM/JI feasibility studies. The FY 2004 subsidies were designed to cover up to one third of the costs of additions to existing facilities; examples included a refuse-derived fuel plant and a wind power plant. The total government budget for the 2004 subsidy was 600 million yen (about U.S. $5.6 million).

The CDM is a scheme under which industrialized countries assist projects for reducing greenhouse gas (GHG) emissions in developing countries by providing funds and technology. Part of the reduction achieved is transferred back to the industrialized countries to meet their GHG reduction targets. Similar projects are implemented among industrialized nations with reduction commitments under the JI.

The government announced on January 28, 2005, that the A. T. Biopower Rice Husk Power Project in Nakhon Pathom, Thailand, has been chosen as a beneficiary of the 2004 subsidy. Chubu Electric Power Co., a Japanese power company, and A.T. Biopower Co., a Thailand-based affiliate, are jointly undertaking the project. The Japanese government will be awarded part of the emission reduction credit from this project in exchange for the subsidy. This is the nation's first governmental subsidy linked to the acquisition of emission credits.



Posted: 2005/06/05 10:58:05 AM
Japanese version