Denmark seals its first CO2 pollution deals

COPENHAGEN - Danish power companies said yesterday three carbon dioxide (CO2) credit deals of a total 160,000 tonnes had been completed with U.S. and German companies under the government\'s pioneer emissions trading programme. \"I can confirm that we have sold 100,000 tonnes credits to E.ON and 10,000 tonnes to Entergy ,\" Leif Winun, head of department for trade and production at Denmark\'s largest power firm Elsam, told Reuters yesterday. The Danish government\'s CO2 programme, launched this year, is a forerunner of emission trading schemes being planned worldwide as countries look for ways to meet their commitments under the U.N. Kyoto protocol to curb greenhouse gas emissions, believed by many scientist to contribute to global warming. Under the terms of the protocol, countries with difficulty in meeting pollution targets will be able to buy the right to pollute from countries whose emissions are below target. Germany\'s utility giant E.ON has interest in the pollution permits because the company owns 50 percent of the Danish Ensted power plant in southern Jutland, which participates in the government programme. Elsam owns the other half. Also rival power company Energi E2 has sold 50,000 tonnes certificates to E.ON, a spokesman at the Danish Energy Agency told Reuters. Energi E2 confirmed the sale of the 50,000 tonnes credits, but declined to comment on the buyer. Neither Elsam nor Energi E2 wanted to disclose the value of the deals, but a broker said the price was less than the 40 crowns ($4.78) per tonne as that is the same as the fine companies would have to pay if they exceed their CO2 caps. \"The price is definely below 40 crowns,\" said trader Albrecht von Ruffer at environment brokerage Natsource which brokered some of the deals. MORE DEALS TO COME Pollution limits have been set for eight Danish companies which account for more than a third of Denmark\'s CO2 emissions from coal and gas fired plants. The eight Danish companies had a total CO2 cap of 22 million tonnes in 2001, of which Elsam\'s limit was 10.5 million tonnes and Energi E2\'s 8.2 million tonnes. \"We still have room to sell additional credits,\" Elsam\'s Winun said. Danish authorities are yet to decide whether pollution credits can be saved and later brought forward. According to the Danish government\'s plan, emissions caps from the eight Danish firms will fall further to 21 million tonnes in 2002 and 20 million tonnes by 2003. Story by Birgitte Dyrekilde REUTERS NEWS SERVICE