The deal – signed under the NSW Government’s emissions trading scheme – involves CO2 Group planting up to 6500 hectares of mallee plantations in western NSW. The trees will absorb and lock up carbon dioxide from the atmosphere and will remain in place for up to 100 years.
“As far as we are aware, this transaction is the first Kyoto-compliant carbon-sinks deal under an emissions trading system anywhere in the world,” said CO2’s legal adviser, Martijn Wilder, head of Baker & McKenzie’s climate change group.
The Kyoto Protocol has been signed by all developed countries except Australia and the US.
But the Carr Government has committed NSW to the climate-change agreement by setting up a scheme that runs from January 2003 to December 2012 and requires electricity retailers and generators to offset 100 million tonnes of carbon with a nominal price of $10.50 per tonne.
CO2 director Harley Whitcombe said the company was optimistic that some other states would follow NSW’s lead.
“Victoria and South Australia have indicated they are interested in the carbon trading option,” Whitcombe told EnergyReview.Net.
“Their premiers are interested and these states are part of the same electricity grid as NSW, so they would be working with the same electricity retailers and generators that had already accepted the NSW scheme. The NSW scheme is also attractive as it involves planting a native tree with deep roots that will help reduce salinity and prevent erosion.”
The trees will be planted mainly on wheat properties, he said.
In the meantime, CO2 has enough work in NSW to keep it busy for a few years, according to Whitcombe.
The NSW government estimates that in 2004 there will be demand for 6.1 million tonnes of offset credits nominally worth $64 million. Over the life of the scheme more than $500 million worth of carbon will be offset.
The value of the seven-year Origin deal has not been disclosed but industry sources have suggested it was worth between $15 and $20 million, according to a report in today’s Australian Financial Review.
CO2 Group was formerly Revesco Group, a Perth gold miner and explorer that reinvented itself a few months ago as an environmental services business, selling carbon credits to clients.
