INTERVIEW - Czechs to sell CO2 rights to World Bank

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PRAGUE, Dec 15 (Reuters) - The Czech Republic will sell up to 10 million tonnes of surplus greenhouse gas emissions rights to the World Bank and it is close to sealing a similar deal with Japan, a government official said on Monday.

The Czechs have a surplus of 150 million tonnes of pollution credits under the U.N.-run Kyoto Protocol, out of which they could sell around 100 million.

“Originally we talked about something around 2 million and now they (the World Bank) came back saying they would like more,” Pavel Zamyslicky, head of the Environment Ministry’s climate change department told Reuters in a telephone interview.

“We talked about something like 10 million. So it could be something between 2 and 10 million,” he said.

The Czech Republic signed a letter of intent with the global lender in Poland last week but did not reveal terms of the deal.

Zamyslicky said the price was agreed to be at least 10 euros a tonne, but added the contract is expected to be finalised in the first two months of 2009.

Benchmark Certified Emissions Reductions (CERs), trading on the European Climate Exchange <CEREc5>, were up 1.3 percent on Monday at 13.60 euros a tonne. They stood as high as 23.88 euros in July.

Zamyslicky also said an agreement had been reached between the Czechs and Japan on price and volume for a planned sale of a portion of the central European country’s pollution rights.

He declined to give details, saying the terms were being reviewed by lawyers.

Asked if the volume would be higher than in the World Bank deal, Zamyslicky said: “It is probable. We could sign a letter of intent by the end of the year, we will see.”

The Czechs are also in talks with other European nations such as Spain, Austria, Belgium and Portugal on selling them a portion of their pollution credits.

Kyoto binds some 37 industrialised nations to limits on their greenhouse gas emissions by 2012, but allows countries which undercut their caps to sell that unused quota to other states busting theirs.

The credits, known as Assigned Amount Units (AAUs), are sold under the Kyoto Protocol scheme, aimed at cutting emissions of the greenhouse gases blamed for global warming.

The Czechs also wanted to sell some 10 million tonnes of surplus rights in an inaugural auction at the turn of the year but postponed the sale to April due to technical reasons and as global prices fell.

By Martin Dokoupil