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  • Published: Apr 29th, 2009
  • Category: Asia
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Asia’s carbon credits market expected to grow despite economic downturn

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SINGAPORE: The carbon credits market in Asia is expected to continue to grow despite the economic downturn.

Asia currently accounts for over 75 per cent of the world’s total carbon projects, and is expected to hold 80 per cent of carbon credits by 2012.

But experts say a regional hub needs to be set up in order for Asia’s renewable energy and carbon trading sector to continue to grow.

Carbon trading is a mechanism designed to balance out carbon emissions. It allows firms to offset their emissions by purchasing carbon credits earned from projects that are friendly to the environment.

As the number of renewable energy projects increase, experts say Asia needs a regional hub to support the sector.

“You have in renewable energy and carbon credits individual projects of their own sizes, so if everyone does it in their own country or location, you do not achieve critical mass to be able to attract the sort of equity debt and trading attention of the financial sector that you need to make,” said the regional head for renewable energy at Rabobank International, Jotdeep Singh.

“Asia, as opposed to Europe, has not been able to exploit its renewable energy and carbon credits potential to even 10 per cent of what is possible on an annual basis.”

And it is Singapore’s geographical location, legal and financial framework which some say make it an ideal location for a renewable energy and carbon credits hub in Asia.

Currently, London is the major hub for carbon trading activities around the world, managing the majority of international projects. And experts say Asia needs a hub of its own.

Mr Singh said: “A lot of Asian projects have been impacted by the financial economic crisis which is more of a Western financial issue. If Asia is to have its own hub that is driven by its own developments, we think that these types of circumstances will impact Asian projects less.”

Renewable energy projects represent about 70 per cent of carbon credits projects in Asia, up from 35 per cent just three years ago.

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