UPDATE 2-Japan utilities bought 60 mln CO2 offsets last year

* With 190 million in years past, brings total to 250 million

* More offsets purchased due to low nuclear run rate -lobby

* BarCap expects buying to reach 300 million by 2012

(Recasts lead, adds comments, BarCap estimate, background)

TOKYO, Sept 11 - Japan's electric power companies bought some 60 million tonnes of carbon offsets under the Kyoto Protocol from abroad in the year ended in March, the Federation of Electric Power Companies of Japan said on Friday.

In addition to 190 million tonnes bought in previous years, last year's offset purchases, worth about 794 million euros ($1.16 billion) at current prices, bring the total number due to be delivered to Japanese utilities by 2012 to 250 million tonnes of carbon dioxide (CO2).

These purchases are aimed at meeting a voluntary goal by the sector to help achieve Japan's emissions target under Kyoto.

Under the Kyoto climate change pact, companies can outsource their greenhouse gas reduction efforts by investing in clean energy projects in emerging countries like China and India, where making emissions cuts costs less. In return, they receive offset credits which can be used towards emissions targets.

Japanese power companies are among the biggest buyers of globally-traded carbon offsets under Kyoto.

FALL IN POWER SALES

The utilities' additional buying came despite a fall in power sales in Japan's business year, which ended in March. This caused their carbon dioxide emissions to drop by 5 percent to 395 million tonnes, the federation said.

The federation collects data on carbon offset buying by its 10 member firms and announces the cumulative total every year.

Members declined to comment on prices, volumes or other details.

"The nuclear power run rate has been staying below what we initially planned," Chairman Shosuke Mori said at a news conference, referring to halts caused by an earthquake and other events.

Mori, also President of Kansai Electric Power Co, said the industry would try to boost the nuclear run rate for the remaining four years, but if emissions cuts from using this low-carbon energy source are insufficient, companies will need to import more carbon offsets.

The sector has self-imposed but not legally-binding carbon intensity targets; each firm should emit 20 percent less CO2 per kilowatt hour per year on average between 2008 and 2012, compared to 1990 levels.

The 10 utilities said they redeemed a total 63.5 million tonnes of Kyoto Protocol CO2 rights to offset 16 percent of their emissions last year.

Japan is the world's fifth biggest emitter, with a power sector that accounts for 30 percent of the country's greenhouse gas emissions.

Research published by Barclays Capital on Friday said Japan's private sector is expected to buy 300 million tonnes of project-based Kyoto offsets by 2012.

Asked if the purchases include government-level Kyoto emissions rights, Mori said "each company is responsible for its own carbon credit buying... I'm sure one option is buying from Eastern Europe," and declined to elaborate further.

Countries comfortably below their Kyoto targets can opt to sell the difference to other governments in the form of emissions rights called Assigned Amount Units (AAUs).

Critics call AAUs "hot air", arguing that most were generated through the industrial and economic collapse in former communist countries in the 1990s, rather than through investment in 'green' projects under the other Kyoto schemes. (For related story, click;)