Researchers are pushing for a new category of carbon abatement – so called “blue carbon” sinks that focuses on mangroves, tidal marshes and seagrasses – to be included in the UN clean development mechanism, the principal form of international carbon credits that Australian businesses will likely seek to access from 2015. According to Point Carbon, researchers believe blue carbon sinks could stores up to 900 million tonnes of CO2-e a year.

“The rules would need to be changed to incorporate other ecosystems and activities such as salt marsh or mangrove conservation in developing countries,” Robert O’Sullivan, head of the North American office of environmental research group Climate Focus, told Point Carbon News in a interview. The Intergovernmental Panel on Climate Change is considering introducing guidance for estimating emissions and removals from coastal wetland ecosystems, such as salt marshes and seagrasses, for a report due in 2013.

Point Carbon said the World Bank is interested in promoting conservation of critical wetlands, which are being drained at a rapid pace, adding an estimated 500 million tonnes of CO2-e a year. One World Bank analyst said it was “still a bit early” to talk about a dedicated fund, although French food group Danone has invested in two pilot projects to restore mangroves – one in Senegal in 2009 and the other in India in 2010, with the hope of generating carbon offsets through the CDM or voluntary carbon market.

Korea in time on ETS

The South Korea emissions trading scheme, which is expected to start in 2015, the same year that Australia transfers to a flexible carbon price, is expected to be of similar size ad similar ambition, according to various carbon analysts. Bloomberg New Energy Finance says the South Korean target is likely to translate into a 30 per cent cut below business as usual by 2020, about the same as Australia’s in per capita terms. BNEF expects that South Korea will have a similar demand on interntational offsets – around 110 million tonnes a year compared to Australia’s 94 million.

South Korea will be the first developing economy to adopt an ETS, and is anxious to do so to stay ahead of its competitors as it seeks to grab a major share of the growing “green economy”. The government has invested tens of billions into a green stimulus program and its major industrial groups are also investing billions into R&D and retooling their businesses. Emission reduction quotas will be imposed on 471 of the country’s largest emitters from this September. Seoul-based Sustinvest Research & Consulting says Korean companies emitted 487t/CO2-e per $1 million of sales – that compares to 658t for other Asian economies ex Japan and less than 400t for European companies.

Sustinvent estimated the nation’s 200 largest companies are avoiding $70 billion of costs associated with emitting greenhouse gases.  “The government is tightening restrictions on emitting greenhouse gases, indicating those that are inefficiently managing energy should bear the costs,” Sustinvest president Ryu Young Jae told BNEF in an interview. “It’s time to reflect those risks when investing in those companies.”

 The Federation of Korean Industries and other industry business groups said this month they are concerned the caps will trigger job losses and rising costs, hurting their global competitiveness.

AEP cans CCS plant

American Electric Power, one of the largest utilities in the US, has dumped one of the country’s flagship CCS projects because of a lack of funds. AEP said the $US668 million Mountaineer plant would not be upgraded from a pilot project that ended in May to a larger scale facility. The US Department of Energy had pledged to fund half of the costs, but AEP had wanted to pass on its share of the costs to its customers, but was not allowed to do so by state regulators, and was unable to find other investment parners.

AEP spent $US73 million on the five storey plant, which used chilled-ammonia technology from France’s Alstom, will now start to dismantle the facility. Alstom said in a statement that the decision was disappointing because the Mountaineer project would have been one of the first across the whole value chain of the CCS process and that’s clearly very important for industry in the US. Bloomberg New Energy Finance said it also indicated the DOE would not support any post-combustion CCS demonstrations that would be most readily adapted to the existing coal fleet.