Iceland to Buy Emission Allowances to Meet Kyoto Commitments

Minister Guðlaugur Þór Þórðarsson.

The Ministry of Environment, Energy, and Climate has decided to buy emission allowances from other nations in order to meet its commitments to the Kyoto Protocol, an international environmental treaty to reduce greenhouse gas emissions.

It has been clear for some time that Iceland has fallen significantly behind meeting it climate goals, far exceeding its original allotment of carbon credits in the quota system established by the Kyoto Protocol. By the time the figures are settled in the middle of this year, Iceland will need to buy emission credits for the equivalent of 3.4 million tonnes of carbon dioxide, according to the Environment Agency of Iceland.

Read More: Energy Credit Market Means Only 13% of Icelandic Energy is Renewable

Notably, Iceland has up until now refrained from buying emission allowances. In a recent memo by Minister Guðlaugur Þór Þórðarson, however, buying emission credits will become key to Iceland meeting its environmental commitments.

According the results of a working group commissioned in 2020, Iceland could best make use of AAU and CER credits. AAU credits, or Assigned Amount Units, correspond to the original emission allowance given to nations under the Kyoto Protocol. Nations with unused emission credits can sell these on the market to other nations exceeding their allotment. CER credits, or Certified Emission Reduction, are given to nations engaged in climate-friendly development projects in under-developed nations.

Vísir reports that no decision has yet been taken on which credit is to purchased by government.

Current estimates indicate that some 800 million ISK [$5.7 million; €5.3 million] will be needed to purchased the required credits. The decision to buy credits is still under consideration, so the funds are not currently allocated. Such an expenditure would require a budget authorisation to finalise.

Critics Say Emission Allowance Leads to No Change

Some critics have vocally opposed Iceland’s intention to “greenwash” through accounting. One particularly outspoken critics has been Pirate representative Andrés Ingi Jónsson.

In a statement to Vísir, Andrés Ingi said: “Iceland will get away with not having implemented real, systematic changes for environmental issues. It will instead be able to resort to accounting tricks and paying fines, actions which have no actual affect on improving the climate.”

According to Andrés Ingi, flaws in the Kyoto system have led to an oversupply of emission credits, meaning that Iceland is allowed to buy these credits at a significant discount. At current market prices, Iceland will be able to buy off each tonne of carbon dioxide produced with around 235 ISK [1.$67; €1.57].

 

 

Engineer Wages Advertising War Against Aluminium Factories

ISAL aluminium smelter

Electrical engineer Reynir Þór Eyvindsson has bought advertising time for a period of some years on national broadcaster RÚV during the holidays, with the intention of reminding the nation of some inconvenient truths about aluminium production in Iceland.

His advertisements come in response to what he identifies as a preponderance of aluminium industry PR in the media during the holidays, which could be seen as “greenwashing” an activity that has a worse environmental impact than many may think.

Aluminium production is a highly energy-intensive industry which has found a home in Iceland thanks to the supply of green electricity. Environmental critics, however, have pointed out that the use of geothermal and hydroelectric power do not simply neutralise the environmental impact of this industry.

iceland aluminium
Screensot – RÚV

The text of the advertisements reads in English: “Icelandic Aluminium Plants: Pay very little in taxes. Emit twice as much CO2 as the entire automobile fleet.  Around 1.5 million tonnes of toxic sludge are produced annually. This could fill the outdoor swimming pool at Laugardalur 1,500 times over. Happy New Year, Reynir Eyvindsson.”

In a statement to Morgunblaðið, Reynir said: “This is a highly political issue. Not everyone agrees that this highly polluting industry should be here.”

Reynir admits that advertising slots on RÚV during the holidays are rather expensive, but he says he doesn’t have much else to do with his money. He pays for the advertisements out of his own pocket, but recognises that they may not stand up to the production quality of the aluminium industry’s professional advertisements. Nevertheless, he counts the money as well spent.

Read more about protecting Iceland’s environment here.