Joan Burton (Dublin West, Labour)
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Question 178: To ask the Minister for the Environment, Heritage and Local Government the spend on carbon credits in each of the past three years, 2007, 2008 and to date in 2009; the commitments or provisions made for the acquisition of further credits in respect of 2009, 2010 and 2011; the amount of the credits purchased which were required and utilised; the marketable value of those credits acquired but unused; if they have been sold or if arrangements have been made to dispose of them; and if he will make a statement on the matter. [16023/09]

John Gormley (Dublin South East, Green Party)
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Under the Carbon Fund Act 2007, the National Treasury Management Agency has been designated as purchasing agent for the State. In 2008, the Agency purchased some 3.5m certified emission reduction units at a cost of €53m. To date in 2009, they have purchased 1.8m units at a cost of €21.6m. No credits were purchased in 2007.

In January 2007, prior to the designation of the National Treasury Management Agency as purchasing agent, my Department committed €10 million each to the Carbon Fund for Europe and the BioCarbon Fund operated by the World Bank. Management of these investments is a matter for my Department and, since enactment of the 2007 Act, payments are made by the Agency through the Carbon Fund process as they arise. In 2008, my Department refunded €3.72m to the Carbon Fund in respect of these investments in the World Bank. No further payments to the World Bank have been made to date in 2009 but periodic drawdowns are a feature of these investments. The amount to be paid each year is not predetermined and in general payments will be made as purchasing transactions progress.

In December 2006, my Department entered into an agreement with the European Bank for Reconstruction and Development to invest €20 million in the Multilateral Carbon Credit Fund. The investment was made in 2006 on foot of a once-off provision from the Department's vote.

These investments with the World Bank and the European Bank for Reconstruction and Development are expected to yield some 3m carbon credits at a projected cost of some €27.6m during the five-year Kyoto Protocol commitment period 2008 - 2012.

The National Climate Change Strategy signalled the possibility of supplementing greenhouse gas emission reductions with the purchase of up to 3.6 million carbon units on average each year in the five-year Kyoto Protocol commitment period 2008-2012 or 18m units in total costing €270m, at a projected unit price of €15. The economic downturn has implications for the purchasing programme. The most recent EPA projections suggest that with full implementation of all announced emission reduction measures the purchase requirement for carbon units will now be between 1.3 and 1.8m units per annum or around 7m units in total over the 2008-2012 period. In the circumstances, the National Treasury Management Agency has been asked to put its purchasing programme on hold for the foreseeable future.

Purchasing requirements to ensure Kyoto compliance are being kept under review and will be revised as necessary in the light of future projections. There are no proposals to sell credits, as, if it transpires that more credits have been bought than are needed in 2008-2012 period, they can be carried forward for use after 2012 in the next commitment period.