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21 February 2008 - Fortum has signed an agreement that will see the Finnish organization purchase approximately 5m tonnes of emission reduction units (ERU) from the Russian Territorial Generating Company No. 1 (TGC-1).
The ERUs will come from Joint Implementation projects conducted at TGC-1's production facilities during the Kyoto Period (2008-2012) of the European Emissions Trading Scheme.
The projects TGC-1 will implement include reconstruction of hydro power plants, expansion and reconstruction of combined heat and power generation facilities as well as energy efficiency improvements with district heating network.
Fortum can use the received ERUs to cover part of its own emissions once these projects are completed and their emission reduction has been verified.
The ERUs purchased cover approximately half of Fortum's annual CO2 emissions and their value is approximately €70m ($103.2m) based on the current market price of Certified Emission Reductions originating from developing countries.
TGC-1 was founded in 2006 as part of the Russian power sector reform. The company operates in northwest Russia from St Petersburg to the Kola Peninsula.
Fortum is the second largest owner of TGC-1 with a slightly over 25 per cent share. The production capacity of TGC-1 is 6200 MW.
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