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MF Global Weekly CDM & VER Market Summary 14th – 20th September 2009

The US is currently dominating trading activity in the global voluntary carbon market. While the rest of world endures a slowdown, strong demand for CRTs as well as persistent volumes on CCX coupled with a growing stream of privately negotiated transactions are eclipsing activity in Europe and elsewhere.

CRTs remain highly sought after with prices varying depending on methodology type and proximity to issuance. 2009+ vintage credits are preferred with 09-13 strips the most common. A shortage of supply is causing projects to be contracted at earlier stages, nearer the bottom of the emerging $6-10 spread. Increased methodologies and locations are expected to help satisfy demand in the mid-term but shortage of supply is expected to persist for 2009.

Charismatic pre-CDM VCUs are still priced $4/5 bid/offered with cheap Chinese VCUs offered around $2 at the other end of the spectrum. Demand is still small as offset retailers watch the market. US VCUs, offered at $5.50 are still priced at a premium reflecting limited supply and increasing demand while Gold Standard credits remain on the shelf as two new Turkish projects were added to the GS Registry.

Trading on CCX was slim for the week with 215 CFIs (21,500 tonnes) transacted. CCX CFI prices were unchanged on the week, with Dec09 CFIs ending Friday’s session at $0.20. There was only one privately negotiated transaction listed on the CX this week, for 200 tonnes of 2008 vintage USA Forestry Offsets at $0.20/t, temporarily bucking the recent trend of PNT activity being greater than on-exchange.A bi-partisan panel on the Senate energy committee expressed concern over the lack of price floors and ceilings in the House Waxman-Markey cap and trade carbon bill.

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