Japan to Fund Feasibility Study on Carbon Offsets for Overseas Projects

Japan’s government will fund feasibility studies on overseas projects using nuclear power and carbon capture and storage technologies to offset its emissions.

Tokyo Electric Power Co. will study the viability of a nuclear power plant in Vietnam while AOC Holdings Inc.’s Arabian Oil unit will work on a CCS project in Indonesia, Japan’s trade ministry said in a statement today. The government will provide 260 million yen ($3.2 million) for studies on 15 emission- reduction projects.

Japan, the world’s fifth-biggest carbon dioxide emitter in 2008, wants to use offsetting to help it cut greenhouse gas emissions by 25 percent from 1990 levels by 2020. International talks in Tianjin, China, to reach an agreement to combat climate change ended this month with little progress made.

“The credits generated from the projects, if materialized, will help Japan export its technologies as well as meet its emission reduction goal,” Noriaki Ozawa, director of the ministry’s Kyoto mechanism promotion office, told reporters in Tokyo today.

Japan has started talks with Vietnam, Indonesia, India, the Philippines, Thailand and Laos on the bilateral offset schemes, Ozawa said. Japan wants them to “co-exist” with the United Nations’ Clean Development Mechanism, which doesn’t include nuclear power and CCS technologies, he said.

The selected projects will be developed in Vietnam, Indonesia, Mexico, Malaysia, Thailand, Maldives, Laos, and China, according to the ministry statement.

In August, Japan chose another 15 projects including “highly efficient” coal power plants, geothermal power units, and energy-efficient technologies at iron and steel factories.

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net

To contact the editor responsible for this story: Amit Prakash in Singapore at aprakash1@bloomberg.net.

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