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Barclays May Cut 2010 Forecast for Supply of UN Carbon Credits
2010-08-19 09:51:09.54 GMT
By Catherine Airlie
Aug. 19 (Bloomberg) -- Barclays Bank Plc may reduce its
2010 forecast for the supply of United Nations Certified
Emission Reduction credits after regulators said they are
reviewing projects that destroy hydrofluorocarbon-23 gases.
"We will probably have to revise downward our 2010 CER
issuance" from forecasts made earlier this month, Trevor
Sikorski, a London-based analyst at Barclays's investment unit
Barclays Capital, said today in a phone interview. He cited
"uncertainty in how long the review process will take."
The UN Clean Development Mechanism Executive Board, backed
by a Bonn-based secretariat, will request reviews for all HFC-23
projects as it questions the method used to determine how many
credits to allot, Kim Carnahan, policy leader of flexible
mechanisms at the Geneva-based International Emissions Trading
Association said yesterday.
Sikorski forecast the UN would hand out 130 million metric
tons of CERs this year, in a research note dated Aug. 5. He said
that 51.6 million tons had been issued in January through July.
Projects that cut HFC-23 gases make up 52 percent of
current supply of credits created under the UN-overseen CDM, the
world's second-biggest carbon market by trading volume after the
European Union's program. A review may delay each issuance by
about two months or more, said Marisa Beck, an analyst in London
for Bloomberg New Energy Finance. She cited new review
procedures adopted by the board on July 30.
'Come Down'
Barclays Capital may also revise down its forecasts for CER
supply in 2011 and 2012, Sikorski said. "If it is just about
information requests, then it is just shifting some 2010
issuance to 2011," he said. "If it is about less issuance,
then the whole forecast would need to come down."
Regulators will review issuance of credits for a Chinese
HFC plant, the fourth such project this week, the secretariat
said yesterday in a statement on its website. The request for
review of the Changshu 3F Zhonghao New Chemicals Materials Co.
plant, backed by BP Plc, Deutsche Bank AG, Enel SpA and RWE AG,
reflected concerns that such projects were getting "excessive"
credits, the secretariat said. The UN board asked for additional
information, including demand for products made from the
processes that create the greenhouse gas.
Should the board change the way it credits HFC-23
destruction projects, "that would have a big impact on the
revenue" received by the emission-cutting installations,
Sikorski said. "It would scare away investors."
For Related News and Information:
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To contact the reporter on this story:
Catherine Airlie at +44-20-7073-3308 or
cairlie@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
--Editors: Rob Verdonck, Torrey Clark
