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South African Cooking Fuel Project to Earn UN Carbon Credits
2010-10-04 06:20:05.0 GMT
By Lauren van der Westhuizen
Oct. 4 (Bloomberg) -- A project aimed at reducing the
amount of cooking fuel used by low-income households in South
Africa will be registered by the United Nations Framework
Convention on Climate Change, or UNFCCC, to earn carbon credits.
The initiative is being carried out by Natural Balance SA,
a Johannesburg-based company that manufactures a heat-retention
device known as the "Wonderbag" that insulates pots, reducing
the amount of time food needs to be cooked on a stove.
"The project will be registered with the CDM executive
board in January or February," Valerie Flanagan, business
development manager for Natural Balance, said in an interview at
a carbon conference in Cape Town.
The company will use revenue from the sale of certified
emissions reductions, or CERs, to ensure the project's
commercial sustainability by subsidizing the price the bags are
sold for, Flanagan said. It will be the first carbon project of
its kind to be approved in South Africa and one of the first in
Africa, Natural Balance said on its website.
Programmatic CDM projects of this type are touted as one
way that developing nations can access carbon markets. High
administrative costs of registering a project with the UNFCCC
have prevented smaller developers from accessing carbon
financing, said the United Nations Environment Program, or UNEP.
Carbon Markets
A programmatic CDM is an instrument that enable developers
to lower transaction costs by bundling or aggregating the
emission reductions of participants in a program. It gives small
and dispersed activities and projects that would be too little
for the traditional stand-alone approach a chance to participate
and profit from CER revenues, UNEP said.
Natural Balance will carry out its project in 13 areas
across the country and is aiming to sell 77,000 bags in each
region per year, Flanagan said on Sept. 29.
An audit carried out by U.K.-based ClimateCare, a unit of
JPMorgan Chase & Co., determined using a Wonderbag cuts about a
half-ton of carbon dioxide a year. Natural Balance is attempting
to sell two bags to each household, thereby saving a ton of CO2
per household annually, Flanagan said.
The project will therefore generate about a half-million
CERs a year that it will sell to earn about 80 million rand
($11.4 million), Flanagan said. Natural Balance has signed an
agreement to sell the carbon credits to JPMorgan's EcoSecurities
Group Plc for the next five years, Flanagan said.
Wonderbag Sales
Natural Balance has sold about 5,000 Wonderbags since the
project's inception in 2008. The main buyer has been Unilever
Plc, a London-based manufacturer and packager of consumer goods,
which has distributed the bags to low-income communities through
product promotions, Flanagan said.
Natural Balance has approached Microsoft Corp. to promote
use of the bags and will be meeting company officials this
month, Flanagan said. The company is also hoping to establish a
partnership with South African retailer Pick'n Pay Ltd. to
distribute the bags, Flanagan said.
Natural Balance's Wonderbag program will be the 18th
project to be registered in South Africa by the CDM executive
board. Four of the projects have been issued with CERs thus far.
For Related News and Information:
Top renewable-energy news page: GREEN <GO>
BNEF carbon model page: CARX <GO>
Sustainability, environmental indexes: SEI <GO>
--Editors: Randall Hackley, Alex Devine
To contact the reporter on this story:
Lauren van der Westhuizen at +27-21-410-0222 or at
lvanderwesth@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
