Azerbaijan’s SOCAR makes first profit in CO2 emissions trade

For the first time, Azerbaijan’s state-owned energy company SOCAR has certified emissions from oil and gas production within the Upstream Emission Reduction (UER) project.

The project, along with a significant reduction in emissions in the oil and gas sector, has created conditions for getting additional income, Report informs, citing SOCAR.

The company said in a statement on June 7 that the UER mechanism is an effective tool to achieve significant reductions in greenhouse gas emissions in the oil and gas operations chain.

According to the Fuel Quality Directive (FQD) of the European Union, oil and gas suppliers implement UER projects to reduce emissions during operations, as well as to minimise their environmental impact, and receive the appropriate certificates. The resulting UER certificates can then be sold to energy suppliers, providing a tool for companies to achieve their emission reduction goals.

On May 11, 2018, a Memorandum of Understanding was signed on the implementation of the Leak Detection and Repair (LDAR) pilot project in cooperation with the Norwegian company Carbon Limits in SOCAR's areas of operation, according to the statement.

As part of the project, monitoring was carried out at the "Bibiheybatneft" Oil and Gas Production Department (OGPD), "Azneft" Production Union, OGPD named after H.Z.Taghiyev, OGDP named after N. Narimanov, and "Absheronneft" OGPD, sources of leaks were identified and measures were taken to eliminate them.

Through the project, emissions of 14,500 tonnes of CO2 equivalent were certified and implemented accordingly. As a result of the project, SOCAR received a profit of 3 million manats ($1.76 million).

Considering the successful experience in this area, SOCAR seeks to implement novel projects for trading reduced emissions in broader segments in the future.