TOKYO - Japanese steel makers now calculate carbon credits they have bought from abroad at 56 million tonnes of CO2 equivalent, a business lobby said on Tuesday, down 3 million tonnes from their previous estimate.

Nippon Keidanren, Japan's main business lobby, annually reviews emission cuts by major industrial sectors, which are bound to self-imposed emission cut goals.

Early investment by companies in emissions-cutting projects in developing countries often yields carbon credits that are cheaper than buying them from the market.

But the risk is that the actual emission cuts could fall below the initial projection from the projects, resulting in lower emission credits.

In a Keidanren report a year ago, steel makers said they would receive a total of 59 million tonnes of carbon credits from abroad to be delivered between 2008 and 2012.

In Japan, steel makers, along with electric power companies, are major buyers of carbon credits via the Kyoto Protocol's market schemes to help the world's fifth-biggest emitter meet its 2008-2012 obligations to the U.N. pact.

As is often seen in the rest of the world, they (steel makers) have experienced a delay in a project itself and waited for a longer time than expected for project approval by a country or by the United Nations, said an official at Japan Iron and Steel Federation's global environment group.

Each company has checked the development of its projects thoroughly and put its estimates for the delivery under scrutiny. The result is a fall by 3 million tonnes, he said.

Asked if any steel maker has sold carbon credits for a profit, the official said: We haven't heard any did so.

KEIDANREN TARGETS

The 34 major industrial sectors under Keidanren have voluntarily committed to curb their CO2 emissions from energy consumption and energy generation to or below the financial 1990/1991 levels over the five years to March 2013.

Their self-imposed targets can be met with globally traded carbon offsets under the Kyoto Protocol.

Unlike compulsory caps on emitters in the European Union, industry-initiated emission cuts are the core part of the Japanese government's plans to meet its Kyoto goal.

Electric power companies said in September that their buying of carbon credits from abroad totaled 250 million tonnes so far. Of that, they redeemed 64 million tonnes to the government in the last financial year ended in March 2009.

On Tuesday, Keidanren said no other industrial sectors except the power industry redeemed Kyoto offsets in 2008/2009.

The 34 sectors produced 469.9 million tonnes of CO2 emissions in 2008/2009, 7.4 percent less than their 1990/1991 levels due mainly to improving energy efficiency, Keidanren said.

That contrasts to a 1.9 percent rise in Japanese greenhouse gas emissions as a whole in CO2-equivalent from 1990/1991 during the same period, the first year of the country's Kyoto obligations.

In Japan, non-CO2 greenhouse gases, such as hydrofluorocarbons used in refrigerators and air conditioners, and CO2 emissions via industrial processes total 10 percent of the total emissions.

Excluding the 34 sectors, the remaining, or about 50 percent, are CO2 emissions generated from using energy by smaller companies, households and farming.

Japan Climate change