Press release

Date: 27.12.01

Contact: Inger Johanne Wiese tlf. 22 24 60 26/ mobil: 909 86159

Bilateral climate change agreement between Norway and Romania – signed 21 December, 2001

Norway and Romania has signed a bilateral Climate Change Agreement on project co-operation for reduction of greenhouse gases. This is the first bilateral Joint Implementation project under the Kyoto Protocol that Norway takes part in, allowing for transfer of credits. The Emission Reduction Units (ERUs) that Norway will receive as payment for the investment, can be used to fulfill the Norwegian Kyoto commitment. In Romania the project will contribute to reduce local air pollution and improvements in the heating systems in city of Fagaras, in addition to reduction in greenhouse gases.

- Most of all the project co-operation with Romania is an example on the large potential that exists for international co-operation to reduce greenhouse gas emissions. This is just a beginning of a co-operation with other countries that is likely to grow strongly in the years to come. The Norwegian Government want to see business and industries more engaged in such projects. It is also important that projects also provide additional effects in the host country, as in this case modernisation of the energy system and reduction in local air pollution, says the Norwegian Minister of Environment, Mr. Børge Brende.

It is estimated that the project will reduce the CO2-emissions with about 500.000 tonnes in the 15 years project period starting in 2002. The agreement implies that Norway will receive about 35.000 tonnes annually or in total 170.000 ton for the commitment period 2008-2012. This can be used to fulfill the Norwegian commitment under the Kyoto Protocol. The cost of the emissions reductions are about 30 NOK per tonnes of CO2, which is relatively inexpensive compared to many national measures in Norway. The ERUs will have a value when the Kyoto Protocol is ratified by both Parties and the Protocol enters into force. The Parties also need to fulfill the eligibility requirements under the Kyoto Protocol to take part in the so-called Kyoto mechanisms. Romania has already ratified the Kyoto Protocol and Norway plan to do so in spring 2002.

The European Bank of Reconstruction and Development (EBRD) has provided a loan to the project and the Romanian Government will contribute with a large share of the financial package. Norway will contribute with about 5 mill NOK to the project in 2002, which accounts for about 10% of the project investment.