U.A.E., Qatar Seek UN Credits to Shrink Biggest Carbon Dioxide Footprints

The United Arab Emirates and Qatar are seeking United Nations credits to develop alternative-energy projects and cut the world’s most-intensive emissions.

Masdar, a renewable-energy company based in Abu Dhabi, plans to get tradable emission credits for solar and waste-heat projects by next year under the UN’s Clean Development Mechanism, a company spokesman said in an e-mail last week. State-run Qatar Petroleum said it expects credits for reducing the flaring of a greenhouse gas linked to global warming.

Qatar and the U.A.E., ranked as the biggest emitters per capita, are members of the Organization of Petroleum Exporting Countries with economies reliant on oil and gas. While they may be the first Persian Gulf crude producers to get UN credits, OPEC is lobbying the world’s second-biggest carbon market to recognize technology to bury carbon dioxide rather than halt greenhouse gases altogether. Almost 200 nations are meeting this week in Cancun, Mexico, for UN climate-protection talks.

“The oil and gas industry has a very high carbon footprint, as do oil nations, but projects in the sector are very hard to justify as deserving of carbon credits,” said Martin Kruska, director of carbon-asset development at Bad Vilbel, Germany-based First Climate Group. “You have to show that the project wouldn’t be feasible without the additional income from the credits.”

Carbon Capture

Saudi Arabia voiced support at the most-recent OPEC meeting in Vienna for UN recognition of carbon capture and storage. The process involves piping emissions into underground storage or aging oil fields before they escape into the air.

Abu Dhabi, the capital city that holds almost all the U.A.E.’s oil reserves, qualified for UN credits known as offsets, designed to encourage richer countries to finance carbon-reductions in developing nations. China and India together have supplied 68 percent of UN offsets for far.

The two UN registered projects in Abu Dhabi stand to receive 2.5 million credits through 2018. With UN Certified Emission Reductions known as CERs trading today at 11.67 euros ($15.18) a ton on the ICE Futures Europe exchange in London, the U.A.E.’s credits would be valued at about 29.2 million euros.

Lacking the natural gas used to generate most of the electricity in Qatar, Abu Dhabi is building solar and nuclear plants to meet power demand forecast to double to 40,000 megawatts by 2020. With a target of getting 7 percent of its power from renewable sources by 2015, Abu Dhabi is replacing diesel-based generation, which costs four times as much as making power from gas.

World’s Largest Emitters

Qatar has signed up a project to capture wasted natural gas at its Al-Shaheen oil field and may get credits before the U.A.E. “Qatar is one of the leaders in these carbon credits,” Abdullah bin Hamad al-Attiyah, Qatar’s energy minister, said in a Nov. 8 interview in Doha.

Iran and Saudi Arabia also have projects in the UN pipeline. Ecuador is the only OPEC member to advance to the stage of issuing CERs.

Kuwait may seek credits through Equate Petrochemical Co., a venture between Dow Chemical Co. and government-owned Petrochemical Industries Co., which plans to capture 450 tons of CO2 daily from existing facilities starting 2012.

Abu Dhabi and Qatar are the world’s two largest emitters per capita, the World Wildlife Fund said in an October report. It takes about 8.1 hectares (20 acres) of forest to absorb the annual carbon emissions of the average Qatari, according calculations by the environmental lobby groups WWF and Global Footprint Network. The figure is almost identical in the U.A.E., while the average is 5.4 hectares for North Americans and 1.2 hectares for Chinese.

Abu Dhabi forecasts its new solar power plant will cut emissions by an initial 57,092 tons between 2009 and 2011 and 174,977 a year from 2012 to 2018, its project document shows. The city has asked for an estimated 119,069 metric tons of credits annually from 2009 to 2018 for recovering waste heat, according to the web site of the UN Framework Convention on Climate Change.

To contact the reporters on this story: Ayesha Daya in Dubai adaya1@bloomberg.net; Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Steve Voss at sev@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.