(BN) Sindicatum Carbon Sells 5.5 Million UN Credits for $84 Million


Sindicatum Carbon Sells 5.5 Million UN Credits for $84 Million
2011-01-13 03:05:21.785 GMT

By Dinakar Sethuraman
Jan. 13 (Bloomberg) -- Sindicatum Carbon Capital Ltd., the
developer of clean-energy projects that's partly owned by
Citigroup Inc. and Cargill Inc., sold 5.5 million United Nations
emissions permits to European buyers.
The company sold UN Certified Emission Reductions on a
forward basis to two energy groups in June and December for
delivery in 2011 and 2012, Chief Executive Officer Assaad
Razzouk said in an interview in Singapore yesterday. The value
of the deal based on current prices is $84 million, he said.
"The conditions for registration and issuance of credits
have improved materially over the past six months," Razzouk
said. "We have a strong Asian pipeline of projects around
biomass and biogas."
The buyers have paid about 25 percent of the value and will
settle the rest at a variable price when the credits are issued,
either at a premium or discount to spot rates, Razzouk said. He
declined to identify the companies. Seven of the Sindicatum's
nine committed projects have been registered, he said.
Global supply of new emissions credits will reach 200
million metric tons this year, 52 percent more than the 132
million tons issued last year, when supply rose 8.2 percent,
according to Barclays Plc.
UN prices will average 13 euros ($17) a ton in the six
months through June, less than a previous forecast of 14.50
euros, Trevor Sikorski, a London-based analyst at Barclays
Capital, said on Jan. 10.

CERs Drop

UN Certified Emission Reductions for December fell 0.1
percent to 10.93 euros a ton yesterday on the ICE Futures Europe
exchange in London. The permits, which slid as low as 10.90
euros, matching the lowest intraday level since March 2009, have
declined 4.1 percent this month. European Union carbon
allowances for December fell 6 cents to 14.25 euros a ton.
Sindicatum, which employs 170 people including engineers,
technicians and climate-change experts, specializes in helping
mining companies use methane from coal extraction and showing
factories how to burn industrial gases rather than release them
into the atmosphere where they would trap heat.
The company's emissions permits will come from ventures
including six projects in China, and the rest in Thailand and
Indonesia where methane is captured from coal mines and
landfills, Razzouk said. Sindicatum is developing 28 projects.
In return, the company earns UN certified emission-
reduction credits, or CERs, for investing in the projects that
eliminate emissions from greenhouse gases such as methane. Power
stations and factories in the EU, the world's largest carbon
market, can use UN credits for compliance.

For Related News and Information:
Climate-change stories: NI CLIMATE <GO>
EU emissions-trading news: TNI EU ECREDITS <GO>
Global carbon dioxide emission: EMDA <GO>

--With assistance from Mathew Carr in London. Editors: Alexander
Kwiatkowski, Jane Lee

To contact the reporter on this story:
Dinakar Sethuraman in Singapore at +65-6212-1590 or

To contact the editor responsible for this story:
Jane, Ching Shen Lee at +60-3-2302-7855 or