On 14 July 2008 Ukraine signed a memorandum of understanding with Japan for the sale of surplus carbon emissions allowances.
The deal will help Japan to reach its emission reduction targets under the Kyoto Protocol and will provide Ukraine with money to fund 'green investment schemes': projects to modernise state enterprises, improve their energy efficiency and protect the environment.
The memorandum of understanding is not legally binding but sets out the basic framework for the transfer of what are known as 'assigned amount units' (AAUs). Volumes and prices are to be determined by further negotiations.
The document also creates the basis for cooperation on 'joint implementation projects' which, according to the Chairman of the Ukrainian National Environmental Investments Agency, will facilitate Japanese investment into projects in Ukraine. Eighteen of these have already received letters of approval and 80 have received letters of endorsement from the Ukraine Government.
Ukraine is expected to generate billions of euros each year by selling its carbon emissions allowances. It has previously made similar arrangements with Canada (2005), Netherlands (2006) and France (2007). Spain, Germany and Austria have also expressed interest in buying AAUs from it.
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The original publication date for this article was 18/07/2008.