Mining industry eyeing carbon credits

REPORT FROM BUSINESSWORLD The Philippine mining industry, with its vast forest land possessions and large power requirements, may be the next industry to take part in the growing international carbon trade. The Chamber of Mines of the Philippines wants to participate in the Clean Development Mechanism of the Kyoto Protocol in a bid to utilize mining tenements for renewable energy activities, which would make mining properties environmentally sound and viable to sell "carbon credits." Chamber of Mines of the Philippines President Benjamin Philip G. Romualdez said in an interview on Thursday that his group is in talks with Klima, the climate arm of the Jesuits’ Manila Observatory, to develop carbon-capture procedures specifically designed to enable mining firms to participate in the international carbon trade. "We want to discuss with them possible technologies to help mines use renewable energy. We want to know how we can do it," said Mr. Romualdez. He said since mining firms need large volumes of power to operate, they might as well utilize renewable energy to generate this requirement and use their saved energy as "carbon credits." "Mining will be a major power utilizer; we have to put up power plants anyway. We want to know what the government mandate is on this [carbon credits from mining operations] so we can do this properly," he said. He also said the mining sector, as an extractive industry, will need to replant trees in the vast tracts of lands in which they operate, hence, they might as well use the reforested trees as credits in the international carbon trade. Countries that signed the 1997 Kyoto Protocol pledged to reduce their domestic emissions of greenhouse gases from 2008 to 2012. Under this agreement, a process known as the Clean Development Mechanism (CDM) gives companies operating in signatory countries the flexibility to use their environmentally "clean" projects as carbon credits, as well as to buy such credits from similar projects of other firms, to offset their own excess carbon emissions. Limits to such emissions are set by central authorities of signatory countries, which are usually national governments. The carbon trade is expected to be a lucrative trade once the CDM mechanism is fully in place among most signatories. At present, Japan is expected to be the largest market for carbon credits, since it is committed to reduce 120 million tons of carbon dioxide emissions by 2012. Apart from actual reduced greenhouse gas emissions, the CDM scheme also considers non-carbon capture mechanisms in the trading process. For example, power-generation plants can participate in the CDM under the logic that the energy they save through enhanced efficiency, for example, would be equivalent to less utilization of fossil fuels. — Beverly T. Natividad/BusinessWorld