OREANDA-NEWS. August 02, 2010. At its session the Government of the Republic approved draft sale and purchase agreement for Estonia’s unused emission permits or AAUs (Assigned Amount Units), which are being entered into with the Kingdom of Spain. With the entry into force of this and previous transactions the government will have sold AAUs to the value of one billion kroons in 2010, which is twice as much as planned in the annual budget.

The sale of the AAUs is taking place as part of the green investment scheme, which requires the revenue raised to be reinvested in environmentally friendly projects designed to reduce CO2 and greenhouse gas emissions. The government’s decision to approve the transaction brought to an end almost a year of preparatory negotiations. Based on the agreement with Spain, the revenue raised from the transaction will be used to develop wind energy and environmentally friendly public transport.

23 million euros (ca 359 million kroons) of AAU sales revenue will be invested in wind energy projects, in addition to the capacity financed through regular tariff support. The support will be issued by the Environmental Investment Centre foundation on the basis of a regulation of the Minister of Economic Affairs and Communications.

As part of the investment scheme for the development of public transport, the state will be spending 21 million euros (ca 328 million kroons) on economical new buses for public service. The Road Administration will be conducting a public procurement in order to implement the support scheme. The buses (ca 110) purchased as a result of the procurement will go into use on regional and outlying urban routes.

Estonia has already entered into two sale and purchase agreements with Austria for the transfer of 2.9 million AAUs and will soon sign another one for the sale of 0.5 million AAUs to the Japanese bank Sumitomo Mitsui Banking Corporation (SMBC).

For Spain this is the six transaction of this kind, after the contract signed in 2008 with Hungary and in 2009 with Latvia, Czech Republic, Poland and Ukraine; this new transaction is part of its efforts to develop International Emissions Trading as a complementary flexible mechanism of the Kioto Protocol, suited to help Annex-I countries to achieve their compliance objectives.