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UN CO2 Offsets Rise as Board Rejects Record Number of Projects
2010-08-02 10:47:24.799 GMT
By Mathew Carr and Ewa Krukowska
Aug. 2 (Bloomberg) -- United Nations carbon credits rose as
the regulator of the Clean Development Mechanism rejected a
record number of projects.
The executive board of the CDM turned down 22 projects
requesting registration, the most during any single meeting, and
approved 21 applications, some conditionally, according to the
minutes published from last week's meeting. The previous record
was 12, according to Bloomberg New Energy Finance, the London-
based research company owned by Bloomberg LP.
UN Certified Emission Reduction credits for December rose
11 cents, or 0.9 percent, to 12.05 euros ($15.75) a metric ton
on the European Climate Exchange as of 11:05 a.m., extending a
four-day gaining streak.
UN offset credits can be used for compliance in the
European Union's emissions-trading system, the world's largest.
EU allowances for December rose 1.3 percent to 14.33 euros, the
highest level since July 20, supported by rising German power
prices.
The UN-overseen board is seeking to respond to criticism
that it is approving projects that would have gone ahead even
without the credits. The value of the global carbon market
expanded 6 percent last year to $144 billion, according to a
World Bank report. The value of transactions in the EU program
rose to $118 billion, while sales of new CDM credits contracted
59 percent to $2.7 billion, because of lower prices, complex
regulations and administrative bottlenecks.
Rejected Projects
"The amount of projects rejected at this executive board
meeting is unprecedented," John Romankiewicz, an analyst in New
York for New Energy Finance, said by e-mail July 31.
Among projects rejected by the board were Chinese windfarms
and hydroelectric projects. At issue for some plans was whether
the board could judge whether the nation was deliberately
dropping renewable subsidies in order to receive increased
funding from the CDM program.
It is the first rejection of a Chinese hydro project on the
grounds of the country's environmental policies, Romankiewicz
said. Project developers have sought more clarity on how to
overcome the board's concerns about national environmental
policies, he said.
"It has not yet moved the board's decision making," he
said. "Instead, projects continue to get rejected."
The CDM board also sought more time and data before
assessing whether the methodology of awarding offset credits
related to hydrofluorocarbons should be changed. It "noted the
concerns" by the experts panel and requested it to provide
information on issues including supply, demand and economic
impact.
For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>
--Editors: Rob Verdonck, Jonas Bergman.
To contact the reporter on this story:
Ewa Krukowska in Warsaw at +32-474-620-243 or
ekrukowska@bloomberg.net
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
