Chile Environment Exploited to Offset European Pollution

Pacific Hydro to sell carbon credits from Chile plant

SYDNEY: Pacific Hydro, an Australian-based renewable energy producer, plans to start selling carbon credits from a hydropower project in Chile (La Higuera hydro project on the Tinguiririca River) to buyers in the European Union, the world's biggest carbon market.

Pacific Hydro, which is owned by the pension funds manager Industry Funds Management, and a partner registered the 155-megawatt La Higuera project with a Dutch authority, allowing the sale of credits in the EU once production starts by the end of 2008, the Melbourne-based company said Monday.

Under the Kyoto Protocol, factories, power stations and other polluters that exceed emissions targets set in the EU may buy certificates from projects that reduce pollution in developing countries. Pacific Hydro plans to invest more than 1 billion Australian dollars, or $870 million, in Chile over the next five years in projects eligible to create the carbon credits.

"The approval of the project with an EU member country is a significant milestone," Rob Grant, Pacific Hydro's chief executive, said in the statement. "This approval paves the way for carbon credits to be traded in the EU Emission Trading Scheme, which is currently the largest carbon market in the world."

Pacific Hydro's partner is SN Power, a venture between Norway's Statkraft SF and Norfund, an investment company funded by the Norwegian government.

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