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United Nations Carbon Credit Prices May Rise by 42% by 2012
2010-10-29 03:28:15.641 GMT
By Dinakar Sethuraman
Oct. 29 (Bloomberg) -- Prices of United Nations Certified
Emission Reduction credits will increase by as much as 42
percent by 2012 as new rules reduce supplies, Barclays Plc said.
CERs under the UN's Clean Development Mechanism program may
rise to about 18 euros a metric ton in two years, and to as much
as 25 euros in the third phase of the European Union's carbon-
trading plan starting 2013, Trevor Sikorski, a London-based
analyst at Barclays Capital, said yesterday. UN CERs for
December fell 1.6 percent to 12.69 euros a ton yesterday on
London's European Climate Exchange.
The issuance of as many as 30 million tons of CERs under
the UN's Clean Development Mechanism may be delayed to next year,
cutting this year's supplies by about 30 percent, Sikorski said
in an interview at the Carbon Asia Forum 2010 conference in
Singapore.
Prices of CERs may average 14.5 euros a ton in the first
half of 2011, and 16 euros in the second half, according to a
Barclays report on Oct. 21. CDM offsets are currently used for
compliance in the European carbon market, the world's biggest.
The UN and the European Union said they may issue new rules
on the methodology of issuance and acceptance of carbon credits
for hydro-fluorocarbon (HFC) combustion plants and other
industrial gases.
The European Commission, regulator of the EU program, plans
to publish an impact assessment on offset restrictions by
November and said in May that projects related to two industrial
gases, HFC-23 and nitrous oxide, create significant windfall
profits and may be banned after 2012. A proposed U.S. energy law
bans HFC credits.
Prices of CERs, which typically track prices of European
Union carbon allowances, will rise as UN restrictions will
reduce supplies of HFC-linked CERs and EU rules will force
utilities and other users to switch to credits from renewable
energy industries, Sikorski said.
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--Editors: Clyde Russell, John Viljoen.
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
