Eni Response to Report Raising Concerns About the Efficacy of the Clean Development Mechanism

Eni response to report raising concerns about the efficacy of the Clean Development Mechanism

Business & Human Rights Resource Centre invited Eni to respond to the following item:

-“The CDM in Africa Cannot Deliver the Money - Why the carbon trading gamble and ‘Clean Development Mechanism’ won’t save the planet from climate change, and how African civil society is resisting” - University of KwaZulu Natal Centre for Civil Society & Dartmouth College Climate Justice Research Project, 18 April 2012.

In response, Eni sent the following response to the Resource Centre:

15 May 2012

Eni has completed and continues to implement a number of initiatives in Nigeria to both provide electrical power to assist in the development of the country and also to reduce the volume of gas flared to 5% of total produced gas in 2014.

These initiatives started since 70s when NAOC began the injection in the reservoir of associated gas in the fields of Akri, Obiafu – Obrikom (Ob-Ob) and Kwale – Okpai. Already in the late 90's, NAOC used about 40% of gas produced, and at that time the project "Zero Gas Flaring" in the Niger Delta region started, aiming to eliminate the flaring of associated gas in the atmosphere. In recent years, NAOC has developed numerous projects, allowing the use of gas and therefore a further reduction of flared gas in the atmosphere.

With the completion in 2005 of the Kwale Okpai power station in Nigeria, eni became the first international company to construct, operate and manage a combined-cycle electric power station designed to reduce gas flaring. In November 2006 this project was awarded CDM recognition as part of the Kyoto Protocol, and it is currently the third biggest registered CDM flaring down project in the world.

The Kwale/Okpai Power Plant completed by eni with its Partners (NNPC 60% and CoP 20%) in the NAOC Joint Venture generates electricity to contribute to the local development of Nigeria.

Even though promoters of CDM projects have the right to receive emission credits that can be used to fulfil the national requirements for emission reductions, eni only has the 20% share of the matured credits for itself, allowing Nigeria to register the majority of credits. The Kwale Okpai power station has a capacity of 480 MW, with the electricity produced being used to supply the national grid with 20% of its needs in a country where less than 50% of the population has access to energy.

The Okpai power station uses combined-cycle technology which minimises heat and CO2 emissions. The sustainability of electricity and steam production is guaranteed by the value of the binomial natural gas - cogeneration combined cycle, which represents the best technology available for thermoelectric production. The technology and fuel used make it possible to obtain the highest levels of efficiency when producing electricity from fossil sources (superior by up to 12% compared with the most advanced coal-fired plant), reducing the emission of polluting substances for each kWh of electricity produced. The Plant is the most efficient in the country.

From the IPP project start up in April/May 2005 to the end of 2010, an amount of emissions’ reductions of 6.38 million ton of CO2eq has been achieved. This quantity of avoided CO2eq has been calculated considering the whole volume of gas recovered and sent to the Okpai IPP from April/May 2005 to the end of 2011.

For the Okpai IPP Project, contract was awarded in 2006 for the electrification of the Okpai villages, namely, Oluchi, Obodo-Oyibo, Umuagulu, Obeze, Ashaka, Anieze, Ibusu. Contractor commenced work in August 2006 but due to intra community crises contractor demobilized in December 2006. Peace was restored in late 2009 and in March 2010, the contract was revalidated with the consent of JV Partners. Presently work is in progress on the electrification project.

During 2010 and 2011, NAOC completed 3 projects at the Ebocha, Ob/Ob and Kwale sites with a subsequent reduction in flared gas. The Nigerian projects which have just been completed, together with those scheduled in the 2012-2015 four year plan, will contribute significantly to meeting eni’s goal of reducing flaring worldwide (approximately half the 2015 target).