Bank takes Meridian wind-farm credits

A wind farm in Manawatu is helping one of the world's largest banks offset its contribution to global warming.

HSBC has bought carbon credits worth about $800,000 from Meridian Energy, which the state-owned electricity generator was allotted by the Government as a subsidy to its wind farm at Te Apiti.

Carbon credits, tradeable rights to emit greenhouse gases, are the currency of the Kyoto Protocol.

HSBC wanted credits for 170,000 of carbon dioxide equivalent to cover its world-wide emissions in the last quarter of this year. It paid US$4.43 ($6.34) a tonne. Meridian provided 125,000 tonnes.

In December 2003, Meridian sold credits to the Dutch Government for 5.50 (then $10) a tonne.

HSBC had announced its intention of "going carbon neutral" from the start of 2006.

The purchase of credits from Meridian, and other sources in India and Germany, is part of a "dry run" for the bank.

Meridian's credits were allotted under the Government's Projects to Reduce Emissions scheme.

The credits are awarded under a competitive tender process to projects which will reduce the emissions of greenhouse gases which New Zealand is accountable for under Kyoto, but which would not be commercially viable without the subsidy.

Wholesale electricity prices are rising and a carbon tax that will raise the cost of power generated from fossil fuels is in prospect, which means the days of wind power needing a subsidy are probably numbered.

The price HSBC paid is less than half the $15 value used by the Government to strike the level of the carbon tax, legislation for which has yet to pass.

- additional reporting NZPA