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EU Should Wait Before UN Offset Ban, de Jonge Says (Update1)
2010-10-27 12:35:14.194 GMT
(Adds regulator comments starting in second paragraph.)
By Mathew Carr
Oct. 27 (Bloomberg) -- The European Union should await
evidence from a probe of the United Nations emissions market
before deciding whether to ban some industrial-gas credits on
grounds of abuse, said the head of the investigating panel.
A ban based on abuse of credits from projects that cut
emissions of hydrofluorocarbons and other gases would be
premature if the EU didn't first assess evidence from the probe,
said Lex de Jonge, chairman of the Clean Development Mechanism
methodologies panel, speaking today by phone.
"As far as I can see there is no fraud," said de Jonge,
responding to media reports alleging abuse. "I think it is very
unlikely there is fraud. Is there something perverse? That's up
to the board to decide."
The European Commission, regulator of the EU market,
expects by November to publish an "impact assessment"
regarding offset restrictions. The commission seeks to limit the
use of credits from projects deemed to be improperly regulated
or excessively profitable for their developers.
The body may propose a ban on credits from projects that
reduce either hydrofluorocarbons, a waste product from the
manufacture of refrigerants, or nitrous oxide, a greenhouse gas
emitted in the production of adipic acid, which is used to make
nylon and other polymers.
The EU decision "should wait until the board has spoken,"
assuming the bloc wants to change its rules at least partly
because of alleged abuse in the emissions market, de Jonge said.
Evidence from his panel is unlikely to be made public
before the CDM Executive Board begins a planned meeting in
Cancun, Mexico, on Nov. 22, de Jonge said. Some information
won't be disclosed because it might harm the competitive
position of emitters, he said.
Rule-Change Timeframe
Regulators may choose to immediately limit the volume of
credits from HFC-cutting projects. Alternatively, they may
impose restrictions only when projects seek credits for a second
crediting period of at least seven years, the chairman said. He
declined to comment on which of these two options is more
likely.
Under the UN system, companies receive credits as a reward
for financing projects designed to curb emissions by polluters
in developing, non-EU countries. Known as offset credits, they
can be sold to utilities and factories that then use them to
comply with emissions limits within the EU.
Enel SpA, Morgan Stanley and RWE AG are among investors in
hydrofluorocarbon credits, according to data compiled by
Bloomberg.
For Related News and Information:
Top Power Stories: PTOP <GO>
Emissions-trading stories: NI ENVMARKET BN <GO>
Today's top energy news: ETOP <GO>
European power-markets home page: EPWR <GO>
--Editors: Bruce Stanley, Rob Verdonck
To contact the reporters on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss on +44-20-7073-3520 or
sev@bloomberg.net
