The estimates for the country’s emissions over 2008-2012 mean that Portugal has already bought 85 per cent of carbon credits required to meet its target, the climate change commission said today.

The commission had previously projected a Kyoto deficit of 14.4 million in 2007, which was already down from the agency’s 2006 estimate of 18.5 million tonnes.

The revision is based on new calculations showing that emissions have been falling faster than anticipated.

The commission reported that surging hydro and wind generation in 2009 and 2010 have resulted in a significant reduction of emissions from the country’s power sector.

Investment halved

The Portuguese carbon fund, which was set up to ensure the country met its Kyoto target via the use of carbon credits, has committed €138.6 million to buy a minimum of 11 million emission rights and carbon offsets.

This is comprised of 4.4 million AAUs, 4.8 million CERs and ERUs, and 1.77 million emissions reductions from domestic projects.

With the new projections, Portugal reckons it will need to invest €162 million to comply with Kyoto at current prices.

This is less than half the €348 million of funding the government initially estimated would be required in 2006.

Economic impact

The government admitted the economic crisis had played a part in reducing emissions and, consequently, in cutting Portugal’s carbon credit requirement.

The commission said the forecasted emissions for the 2008-2012 Kyoto compliance period could still alter significantly due to three factors: forest fires, failure to cut transport emissions and a lower-than-estimated take-up of the new entrants reserve of the EU ETS.

In extreme circumstances the deficit could vary between 8.65 and 22.75 million tonnes over the five years, it added.

By Richard Weyndling – news@pointcarbon.com

Pamplona