Shortly after successfully lobbying against having its carbon cap tightened, Poland has agreed to sell around €25m worth of carbon credits to Spain in a move allowed under the Kyoto Protocol.
Managed by the European Bank For Reconstruction and Development (EBRD) and the European Investment Bank (EIB), the deal is the first of its kind for Poland and should help Spain meets its Kyoto targets, according to the banking groups.
For its part, Poland will direct some of the money raised from the sale into a Green Investment Scheme, which will be used to fund environmental projects such as biomass, biogas electricity and development of Poland's electricity network to work more efficiently with renewable energy sources such as wind.
Poland reportedly has a carbon credit surplus equivalent to around 500 million tonnes of CO2 for the period 2008 to 2012, which it puts down to improvement in its economy.
"The surplus and emission reduction is a result of the complex restructuring of the Polish economy and considerable investment in environment protection," the EIB and EBRD stated.
The country plans to pursue similar deals in the future which will generate cash to help fund more environmental projects.
“The Polish Green Investment Scheme has been designed to ensure effective and transparent management of revenues from the sale of AAUs [Assigned Amount Units] and monitoring the subsequent environmental impact," said Polish environment minister Maciej Nowicki.
AAUs - redeemable for the emission of one metric ton of carbon - can be transferred in accordance with Article 17 of the Kyoto Protocol, as long as the selling country uses revenue for investment in climate-friendly projects.
In September, Poland and Estonia successfully appealed a European Commission decision to tighten their caps and won, paving the way for similar decisions on the caps of Bulgaria, Czech Republic, Hungary, Latvia, Lithuania and Romania, all of which also appealed.
But according to experts, the appeal by Estonia and Poland won't actually lead to a flood of carbon credits and the price of carbon dropping, as some have feared.
Analyst Point Carbon claims the moves could actually lead to tighter caps and a reduction in the number of carbon allowances in circulation.
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