Tokyo--At Tokyo Electric Power Co. (TEPCO), we have decided to invest a total
of US$10 million in the Japan Greenhouse Gas Reduction Fund (hereinafter
referred to as JGRF) that was established today. This represents our new
activities to help arrest global warming.
Investment will also be made in Japan Carbon Finance, Ltd. (hereinafter
referred to as JCF), a company that uses the funds provided by JGRF to
invest in greenhouse gas reduction projects and to buy credits and resells
them to JGRF. We recently obtained 1,250 of JCF's ordinary shares with a
total investment amount of \12.5 million (investment share: 14.3%).
JGRF is Asia's first carbon fund established by a total of 33 entities
including the Japan Bank for International Cooperation, the Development
Bank of Japan and 31 domestic private-sector corporations and groups, with
the goal of promoting anti-global warming programs and measures that utilize
the Kyoto Mechanism (Note 1). The scale of the overall fund amounts to
US$141.5 million.
Meanwhile, JCF whose shares are owned by JGRF's major investors comprising
seven corporations including TEPCO, receives funds from the JCRF to invest
in greenhouse gas reduction projects in developing countries as well as in
economies in transition, and to purchase carbon credits while making use of
the domestic and overseas network of the Japan Bank for International
Cooperation and the Development Bank of Japan as well as the expertise of
investing corporations. Later, it resells the credits to JGRF.
TEPCO's decision to invest and participate in these two entities was
based on the following:
- By investing in JGRF that can be expected to identify and develop
outstanding greenhouse gas reduction projects and obtain carbon
credits in a stable manner, TEPCO can hope to obtain a total of
approximately 1.4 million tCO2 worth of carbon credits that are
allocated in proportion to the amount of investment made, and
- By investing and participating in JCF, TEPCO can expect to obtain
the knowledge and expertise on carbon credit-related businesses and
overseas projects and operations.
TEPCO is committed to achieving a 20% reduction in carbon dioxide
emission intensity in FY2010 over FY1990 levels, which was the global
environment contribution goal set forth under Management Vision 2010, our
group's medium-term management policy. To meet this goal, we will work to
promote nuclear power generation premised on ensuring safe and secure
operations, to develop and spread the use of natural energy, and to improve
the heat efficiency of thermal power generation, among other measures. In
addition to various programs that are already been implanted, such as
investing in plantation projects in Australia (Note 2), the World Bank's
Prototype Carbon Fund (Note 3) and Bio-Carbon Fund (Note 4), and a project
to collect methane in Chile (Note 5), we will additionally invest in JGRF
and JCF to further focus our efforts on reducing greenhouse gases in other
countries by utilizing the Kyoto mechanism. We will continue to aggressively
carry out activities to prevent and arrest global warming both in Japan and
abroad.
(Note 1) Kyoto mechanism
This is the method acknowledged in the Kyoto Protocol, of offsetting
the volume of domestic greenhouse gas emission with other countries'
emission limits and emission reduction/absorption volumes ("carbon
credits"). It refers to the following three methods:
(a)Clean Development Mechanism (CDM)
A mechanism by which developed countries and/or economies in
transition implement projects in developing countries to either
reduce emissions or to increase the volume of absorption, and
obtain carbon credits generated as a result of such projects.
(b)Joint Implementation (JI)
A mechanism by which developed countries and/or economies in
transition implement projects in other developed countries and/or
economies in transition to either reduce emissions or to increase
the volume of absorption, and obtain carbon credits generated as
a result of such projects.
(c)Emissions Trading (ET)
This refers to the trading of emission limits between developed
countries and economies in transition.
(Note 2) Plantation projects in Australia
A project has been underway since 2000 to plant eucalyptus and pine
trees in New South Wales, Australia, through TEPCO's 100% subsidiary,
TEPCO Forests Australia Co. (TEFA). The plan calls for planting trees
covering a total area of approximately 10,000 hectares by 2009, and
obtaining approximately 3.5 million tCO2 worth of carbon credits by 2039.
TEPCO also invested in a tree planting project in Tasmania, where trees
were planted in an area covering a total of approximately 12,000 hectares
by the end of 2003.
(Note 3) The World Bank's Prototype Carbon Fund
This is the world's first carbon fund to invest in CDM/JI projects. It
was launched in 2000 with fund scale amounting to US$180 million. TEPCO
has pledged to make US$8 million worth of investments, and expects to
obtain approximately 1.5 million tCO2 worth of carbon credits.
(Note 4) The World Bank's Bio-Carbon Fund
This is a carbon fund launched in 2004 specializing in investments in
projects such as forest preservation activities, planting and re-planting
of trees, and sustainable agriculture and forestry. TEPCO has pledged to
make an investment of US$2.5 million, and expects to obtain approximately
500,000 tCO2 worth of carbon credits by 2020.
(Note 5) Methane-collection project in Chile
Agro-Super Co., Chile's major food processing company, and TEPCO jointly
carry out a methane collection project in Chile. Approximately 2 million
tCO2 worth of carbon credits created out of this project will be purchased
during a 9-year period from 2004 to 2012.  Appendix
Overview of the Japan Greenhouse Gas Reduction Fund and Japan Carbon Finance, Ltd.
How the system of carbon credit allocation works |
