Cement, Energy and Environment

There are two reasons. Credits from HFC-23 (fluoroform, a pdtent greenhouse gas) projects will go up as suspension on such projects will go up as suspen~on on such projects has been lifted. Also many power plants have been shifting from coal to gas, whose market is passing through a glut, leading to lower demand for such credits. Certified emission reduction (CER, also called carbon credits) prices are trading only a little above the current financial year's low, seen in July. They're down nearly 20 per cent from the recent high of €14.07 in October. Some months earlier the United Nations' Forum for Climate Change's (UNFCC's) Clean Development Mechanism had suspended carbon credits generated by HFC-23 project which led to a rise in prices. Some Months UNFCC'S Ago, Clean Development Mechanism had suspended carbon credits generated by HFC- 23 projects, which led to a rise in prices However, many companies in India and China had sold such credits at €9-10 each. Lobbying by these buyers met with success and COM approved the credits generated by such projects. The decision came last weekend and CER prices on the European climate exchange fell further in the beginning of the week, reaching a level which is the lowest in the past four months. "The COM executive board's decision to lift the suspension on the issuance of carbon credits to HFC-23 projects might have come as good news for the project developers, but it will have its repercussion on the pricing economics of carbon credits. The move is likely to press down the prices of the credits due to the enhanced supply," said Anmol Singh Jaggi, Director, Gensol Consultants. Jaggi says he's turned bearish for the carbon credit market. He says, "The move was largely unexpected, owning to which the prices of the credits had shot up in the recent past. Now that these credits will be added to the market's breadth, one can safely expect carbon prices to tumble further a fact that is likely to hurt investors' confidence. All hopes now hinge on the outcome of the Cancun climate talks . Only a positive result can lift up the battered sentiment in the carbon market." Prices were falling in recent weeks also because there was lower demand for such credits from power plants. According to Platts, the leading information provider on energy, "Coal prices have been rising and gas prices remained subdued for long. This was also bearish for carbon prices, since higher coal values incentivise power generators with the ability to change fuels to switch to burning gas, which is less carbon-intensive, reducing their carbon-purchasing needs." Courtesy: The Business Standard, December 2, 2010, Pl. USE SHIPPING LINES AND GET CARBON CREDIT Companies using India's coasts to transport goods between domestic ports can soon start claiming carbon credits as the shipping ministry, in collaboration with its environment and commerce counterparts , is framing a mechanism to enable firms to know how much carbon emission they have prevented and receive the monetary benefits for that. This is the first time that the government is linking the shipping sector with carbon credits. It is one of the measures through which the shipping ministry wants to promote coastal shipping , which accounts for only 6% of the total domestic cargo movement even though the country has more than 7500 km coastline and over 200 ports. In Europe, coastal shipping has a 40 per cent share in total cargo moved. Courtesy: TERI (The Energy and Resources Institute) Newswire, 16-31 Oct. 2010, P13. INDIAN FIRMS TO GAIN AS CARBON TRADE GOES REGIONAL Indian carbon credit sellers may stand to benefit as newer markets such as South Korea and Taiwan are set to open up, even as fragmentation in global carbon trade seems imminent with uncertainty over the continuation of the Kyoto Protocol beyond 2012. Countries such as Australia , China, Japan, South Korea, and Taiwan are in the various stages of coming out with their own cap-and-trade schemes to curb emissions. The Indian companies have traditionally sold their carbon credits in the compliance markets in the European Union. Courtesy: TERI (The Energy and Resources Institute) Newswire, 16-31 Oct. 2010, P14. UN CARBON CREDIT INVESTORS SEE PROSPECTS AFTER 2012 Investors in the COM now have more confidence in the carbon offset market after 2012, after the number of post-2012 carbon credit deals rose in recent weeks. The COM is part of a UN treaty to fight climate 58