Fridrik Andersen and Karl-Johan Lehtinen interviewed by the Russian news agency RBC
Russia has committed to reducing its releases of phosphorus with 2500 tons per year. This will put increased pressure on the waste water treatment plants in St Petersburg and Kaliningrad, but also on the Russian agricultural sector that accounts for an increasing share of the Russian releases of nutrients into the Baltic Sea.
NEFCO has also initiated a debate about setting up a regional nutrient trading system, which could work as a complementary alternative to reduce the releases of nutrients into the Baltic Sea.
NEFCO released last week the pre-feasibility study "Framework for a Nutrient Quota and Credits' Trading System" which outlines how such a system could work in practice.
The report foresees no fundamental judicial obstacles that would hinder the set up of a regional nutrient trading system. However, the system needs to address the burden sharing and equitable allocation between states, the role of European Community legislation, the impact of state aid jurisprudence and the principle of subsidiarity.
Phosphorus and nitrogen credits could be sold and purchased by private companies, foundations, funds and international finance institutions. The nutrient trading system would differ significantly from current international carbon trade systems mainly in geographical terms. The carbon trade is global whereas the trade with phosphorus and nitrogen would be a regional system open only to players operating in the Baltic Sea drainage area.
The study outlines a model where the trade system could be established and implemented in four different stages. The municipal waste water treatment plants would be included in the system already in the first stage of the trading system. The second phase would focus on point releases from industrial facilities or fish farms. The agricultural sector would be targeted in the third stage, whereas air-born releases and technology used for reducing the internal load from the bottom sediments would be included in the fourth stage.
NEFCO is an international finance institution owned by the five Nordic countries. NEFCO finances investments and projects in Russia, Ukraine, Estonia, Latvia, Lithuania and Belarus, in order to generate positive environmental effects of interests to the Nordic region.
For more information, please contact:
Fridrik Andersen, Project Manager, NEFCO, +358 50 341 5726
Kari Homanen, Senior Investment Manager, NEFCO, +358 50 3111 047
Mikael Sjövall, Communications Manager, NEFCO, +358 50 3535 045
