Using offsets from projects that curb wasted natural gas in
Russia and Ukraine or reduce fuel consumption in those nations
would free up energy for the EU and cut prices, de Klerk said
yesterday by phone. "A lot of people only have a climate-change picture," he said. "You need to see the bigger picture, which
includes energy supply."
+------------------------------------------------------------------------------+
EU Should Choose Offsets to Cut Energy Costs, Global Carbon Says
2010-11-16 12:28:48.121 GMT
By Mathew Carr
Nov. 16 (Bloomberg) -- Europe should consider using CO2
offsets that would also reduce natural gas prices when choosing
which credits to allow into its emissions market in the eight
years through 2020, said Global Carbon BV.
The European Union market should make room in its third
phase, which runs from 2013, for credits under the Joint
Implementation mechanism of the 1997 Kyoto Protocol, the second-
biggest United Nations offset market, said Lennard de Klerk,
managing director of Global Carbon, the Netherlands emissions-
reduction developer.
The European Commission, the market's regulator, said Oct.
28 it may ban credits from reducing hydrofluorocarbons and
nitrous oxide. That may create space for 560 million metric tons
of offsets in the eight years, according to an estimate by
Bloomberg New Energy Finance in London last month.
Using offsets from projects that curb wasted natural gas in
Russia and Ukraine or reduce fuel consumption in those nations
would free up energy for the EU and cut prices, de Klerk said
yesterday by phone. "A lot of people only have a climate-change
picture," he said. "You need to see the bigger picture, which
includes energy supply."
The EU should consider negotiating so-called bilateral
agreements with Ukraine and Russia for after 2012, the final
year with targets under Kyoto, de Klerk said. Those two nations
could export offset credits to the bloc, assuming UN envoys
continue to fail to seal a global climate-protection deal at
talks that continue later this month in Cancun, Mexico.
"We really have to focus on these gap measures,"
especially if there is little progress at Cancun, to create
demand for credits, he said. De Klerk is also chairman of the
Joint Implementation Action Group, a lobby group of eight
project developers including Camco International Ltd.
Second Biggest
The so-called JI program has issued 24.5 million metric
tons of Emission Reduction Units through October, according to
e-mailed analysis from Vertis Environmental Finance, a Budapest,
Hungary-based company that analyzes the carbon markets. About 40
percent of those are from Ukraine.
The Clean Development Mechanism, the biggest UN offset
market, has supplied 450 million tons of Certified Emission
Reduction credits since its first issuance in October 2005.
Emission Reduction Units, or ERUs, for settlement in
December closed yesterday at 12.34 euros ($16.77) a ton in
London on the ICE Futures Europe exchange, compared with 12.48
euros a ton for a comparable CER credit.
ERUs create incentives for emission-reduction projects in
developed nations, including Russia and the former-Soviet
states. Manufacturers and utilities can use ERUs and CERs to
comply with emissions limits in the European CO2 market, the
world's largest.
Other developers are keen to fill any new EU demand. The
bloc should allow use of emission credits from forest protection
to fill any gap from the potential ban of some industrial-gas
credits, Christian Del Valle, director of environmental markets
and forestry at Paris-based BNP Paribas SA, said Nov. 10.
For Related News and Information:
For New Energy Finance Model, Weekly Research CARX <GO>
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: Stephen Cunningham, Rob Verdonck.
To contact the reporter 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 at +44-20-7073-3520 or sev@bloomberg.net
