Keep it Green - Picking up steam
Why the UAE’s first project to be awarded carbon credits marks an important milestone...
Until fairly recently, the Gulf had something of a modest record when it came to sustainable development - to put it mildly. The region’s unprecedented recent round of construction projects, its unforgiving climate and its abundance of fossil fuels all combined to create a situation where the environmental record
of many countries was as unimpressive as their economic progress was admirable.
Indeed, the UAE itself has previously held the unwanted tag of the being the world’s second-biggest emitter of greenhouse gases per head of population - lagging only Qatar in one global study.
However, there are welcome signs that we can expect progress on this front. Projects like Abu Dhabi’s Masdar City, or Dubai’s Sheikh Mohammed bin Rashid Al Maktoum Solar Park are merely the most obvious signs of a rapidly changing mindset.
As well as the ethical imperatives for pursuing cleaner, greener investments, increasingly investors are alive to commercial advantages of adopting such a strategy. In recent years many investors have taken to trading on the carbon market in the same way they once dealt in oil and gold.
In layman’s terms, projects that are deemed to mitigate or reduce the effects of greenhouse gas emissions are awarded carbon credits.
These credits - known as Verified Carbon Units (or VCUs) - may then be sold on the carbon market to companies who wish to reduce their carbon footprint.
But while the Gulf has seen an increase in carbon trading, the credits that have been changing hands have largely been generated by projects far from home.
If you’re holding a carbon credit, the chances are it originated from a sustainable venture based nearer Copenhagen than Khobar. It will take time for that to change, as the authorities governing the market want each particular green project they approve for credits to be operational for several years before they get the thumbs up.
That’s why the news that an Abu Dhabi energy project has become the first UAE-based venture to be awarded carbon credits is such good news. In fact, it’s a national environmental breakthrough.
Emirates CMS Power Company (ECPC), a combined power and desalination project owned by the Abu Dhabi Water and Electricity Authority (ADWEA), has received more than 36,000 Verified Carbon Units to date in certificates currently priced at more than $13 each.
The project, based at Al Taweelah, recovers heat to generate low-pressure steam to reduce greenhouse gas (GHG) emissions. The plant includes gas turbines, heat recovery steam generators and steam turbines, with water production achieved from four distillers fired by waste heat from the gas turbines.
It is hoped the project will now stand as an example to other firms seeking to bolster their sustainable development credentials.
Franklin Connellan, head of investments at Dubai-based sustainable investment group AGT, says: “One of the most common questions our team of consultants based in the UAE are asked - particularly by businesses looking to retire carbon credits as part of their CSR programmes - is ‘which projects in the UAE benefit from this type of funding?’ and up until now there haven’t been any, so this development is a big deal.”
Franklin Connellan is head of investments at AGT, a world leader in VCS verified carbon credits.
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