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Carbon Credit Prices May Increase in 2010, IETA Says (Update1)
2010-08-25 09:15:32.734 GMT
(Updates with CER prices in third paragraph.)
By Dinakar Sethuraman
Aug. 25 (Bloomberg) -- Prices of carbon credits generated
by developing countries may rise over 2010 as regulators review
industrial gas projects and Chinese wind energy facilities,
fueling speculation that supplies will slow.
"There are fears of a supply squeeze because of fears
industrial gases will not be allowed to produce certified
emission reduction credits (CERs)," said Henry Derwent, chief
executive officer and president of the Geneva-based
International Emissions Trading Association (IETA), in an
interview ahead of the Carbon Forum Asia conference.
UN Certified Emission Reductions for December rose 0.8
percent to 13.36 euros a metric ton today. The offsets have
risen about 15.5 percent in the past month after regulators said
they are reviewing projects that reduce hydrofluorocarbons.
Regulators of the UN Clean Development Mechanism, the
second-biggest emissions market, said on Aug. 18 they won't
immediately issue tradable emissions credits to the developer of
a Chinese hydrofluorocarbon-23 project as they seek more
information. UN regulators are ramping up scrutiny after
allegations that some developers are seeking excessive credits
related to HFC-23, an industrial gas whose warming potential is
11,700 times more powerful than carbon dioxide.
The UN is investigating projects involving Chinese wind
power generators and factories seeking credits to reduce HFC-23
even as the European Union considers changes in rules to
acceptance of such credits to comply with domestic regulations,
Derwent said in Singapore today. These measures together create
uncertainty and threaten to reduce the supply of CERs as HFC-
mitigation credits account for more than half of the issuance so
far, he said.
"Demand for CERs may increase now," as global economies
start to turn around and the outlook for growth improves,
Derwent said. IETA's members include Goldman Sachs Group Inc.
and Royal Dutch Shell Plc.
CERs, awarded to projects that lower emissions in
developing nations, can be used to comply with the EU emissions
trading system, the world's largest cap-and-trade program.
For Related News and Information:
Top environment stories: GREEN <GO>
Stories about U.S. and climate: TNI US CLIMATE <GO>
Global emissions data: EMIS <GO>
Northeast U.S. trading: RGGI <GO>
--Editors: Clyde Russell, John Chacko.
To contact the reporter on this story:
Dinakar Sethuraman in Singapore at +65-6212-1590 or
dinakar@bloomberg.net.
To contact the editor responsible for this story:
Clyde Russell at +65-6311-2423 or crussell7@bloomberg.net.
