* Czechs expect to sell most of 100 mln T of CO2 rights
* Deals with Spain, Austria, Japanese firms seen in Sept.
* Czechs still mulling whether to hold an inaugural auction
* Sales to have no impact on state budget
By Martin Dokoupil
PRAGUE, July 17 (Reuters) - The Czech Republic expects to
sell most of its 100 million tonnes of surplus greenhouse gas
emissions rights this year to European Union governments and
private companies, a government official said on Friday.
The central European country had been re-thinking such sales
earlier this year after the global economic crisis pushed the
price of emissions rights to record lows.
But sales of sovereign pollution credits under the Kyoto
Protocol climate pact are back on the table as the market
recovers, said Pavel Zamyslicky, head of the Environment
Ministry's climate change department.
"(The progress of) bilateral talks indicates that we could
sell almost the whole surplus by the end of this year,"
Zamyslicky told Reuters in a telephone interview.
"There are different scenarios and the most optimistic one
says that around 90 percent of the surplus could be sold. But it
depends on the progress of the talks."
The Czechs agreed to sell 40 million tonnes of credits to
Japan in March in a government-to-government deal. They now hope
to seal two or three deals in September as talks look promising
with some EU governments and Japanese firms.
"We expect to finalise talks with Spain and Austria,"
Zamyslicky said. "We (also) expect that there could be an
agreement with one or two private companies from Japan."
None of the potential buyers is willing to purchase an
amount close to that seen in the Japan deal, Zamyslicky said,
adding the volumes in talks swing around 5 to 10 million tonnes,
and sometimes less, per prospective buyer.
Prague has been also in talks with the World Bank, Portugal
and Belgium on selling them a portion of so-called Assigned
Amount Units (AAUs), which can be used by governments to meet
emissions targets under Kyoto.
Critics call AAUs "hot air", arguing that most were
generated through restructuring in eastern Europe in the 1990s,
when polluting industries in ex-communist countries were
shutting anyway, rather than by new investment in clean energy.
Governments can also use United Nations-approved Certified
Emissions Reduction (CER) offsets, which are generated by clean
energy projects in emerging countries like China and India.
Zamyslicky declined to reveal possible pricing. The ministry
said in March it wanted to fetch as much as 10 billion crowns
($543.8 million) from offset sales this year. The proceeds have
no impact on the state budget as they are used for energy
savings projects.
CERs, the benchmark for AAU pricing <CEREc1>, have recovered
in price to trade around 13 euros on Friday after bottoming at
7.15 euros in February. They are still well below a record peak
of 23.88 euros hit a year ago.
Zamyslicky said the ministry was mulling whether to go ahead
with the long delayed inaugural auction of 10 million tonnes of
surplus credits as the bilateral talks are advancing well.
(Reporting by Martin Dokoupil, Editing by Michael Szabo and
Michael Kahn)
