The Norwegian Ministry of Finance has signed an agreement with NEFCO to purchase carbon credits in the second commitment period of the Kyoto Protocol (2013-2020). Through this agreement Norway will purchase carbon credits from stranded UN-approved projects facing a risk of discontinuation due to the low prices on Certified Emission Reductions (CER).
The new carbon procurement facility established by Norway and NEFCO to be called the NEFCO Norwegian Carbon Procurement Facility, NorCaP, will be wholly funded by the Norwegian Ministry of Finance.
NorCaP will invest in registered projects under the Clean Development Mechanism (CDM) facing risk of discontinuation due to the prevailing low carbon prices. This includes projects which are otherwise at a standstill or “stranded”, with priority given to projects that can be re-started promptly. The facility will cover all CDM project types with the exception of hydro and wind projects in countries other than Least Developed Countries; industrial gases, namely trifluoromethane (HFC-23), produced as a by-product of chlorodifluoromethane (HCFC-22), nitrous oxide (N2O) from adipic acid and coal based energy production without carbon capture or storage.
The fund’s target is to procure up to 30 million Certified Emission Reduction Units from these project types. NorCaP will use the same fund management team as in the Baltic Sea region Testing Ground Facility (TGF) and NEFCO Carbon Fund (NeCF), previous facilities which had attracted and managed EUR 200 million from public and private participants, and have to date delivered more than 7 million credits. Norway is a participant in both funds.