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Power station signs first ever carbon trading deal


| Sourced From News.com.au |

Victoria’s Loy Yang Power signed a contract with Brisbane-based commodities trader and risk manager Arcadia Energy Trading.

Under the agreement, AET will deliver in late 2011 offsets or credits covering a small portion of Loy Yang’s greenhouse gas emissions.

Loy Yang, controlled by AGL Energy and Tokyo Electric Power Co, bought 100,000 Certified Emission Reduction units under which each unit or credit offsets one tonne of CO2-equivalent emissions.

Credits come from carbon reduction projects in developing nations as part of the United Nations-monitored Clean Development Mechanism. They are traded on the European Climate Exchange.

Last May AGL Energy and Westpac signed the first trade in Australian carbon pollution permits at $19 a tonne but this was largely symbolic given Australian units don’t yet exist. Yesterday’s contract price wasn’t disclosed.

The Australian Securities Exchange plans to launch futures contracts for renewable energy credits, natural gas and coal before the start of carbon futures trading some time during the year.

AET’s general manager of trading, James Gillard, said yesterday’s landmark deal showed corporate Australia was beginning to actively manage its greenhouse gas costs.

Loy Yang Power said: “Despite our significant concerns regarding the viability of the proposed (emissions trading) legislation, it is very important that LYP supports the development of a liquid secondary market for the trading of carbon to ensure LYP is able to manage its carbon risk effectively.”

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