Omnia, IFC in carbon credit deal

first_img28 March 2008South African chemical, mining and agricultural company Omnia has entered into an agreement with the International Finance Corporation to sell up to one million carbon credits over the next five years, in a deal worth some €15-million (about R188.5-million).The IFC, a member of the World Bank Group, will purchase the carbon credits, known formally as Certified Emission Reductions (CERs), from Omnia Fertilizer and sell these on to international buyers.“The IFC has committed to purchase a minimum 50% of all Omnia’s CERs for the next five years and will guarantee the delivery of the credits to potential buyers,” Omnia said in a statement last week.The Clean Development Mechanism of the Kyoto Protocol has established CERs as an asset that can be traded in global markets and aims to decouple economic growth from greenhouse growth.“IFC places a strong emphasis on environmental and social sustainability and is eager to work with companies who want to undertake climate friendly projects and commercialize carbon assets,” said IFC Southern Africa manager Saleem Karimjee. “We hope that Omnia’s move will encourage other companies in Africa to also reduce their greenhouse gas emissions.”Clean Development MechanismOmnia Fertilizer will generate approximately 420 000 CERs per annum at its Sasolburg plant, through the installation of a nitrous oxide destruction facility at its nitric acid plant, which will significantly reduce the plant’s nitrous oxide emissions.Greenhouse gas emissions, including nitrous oxide, are believed to be the cause of global climate change.Omnia announced the approval of the Clean Development Mechanism plant in August last year, and the plant, which uses German-developed Uhde technology, is now fully operative.The carbon credits Omnia’s plant will produce are expected to add R60-million to the group’s revenue annually, based on the current price of CERs, which is currently approximately €15 per ton.“The construction of our nitrous oxide destruction facility underlines Omnia’s commitment to sustainable development and reflects the group’s focus on improving all areas of our environmental management,” said Omnia Fertilizer MD Trevor Grant. “We believe IFC, with its AAA-rating and experience in the carbon trading market, is an ideal partner to assist us in generating strong revenue from the carbon credits we will generate.”SAinfo reporterWould you like to use this article in your publicationor on your website?See: Using SAinfo materiallast_img

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