VER activity is picking up with market participants returning from the summer slowdown and the improved economic outlook in Europe driving end user demand for exotic VCUs. Interest continues to centre on non-typical project locations and methodologies with African credits and close to issuance Forestry offsets top of buyer wish lists. Recent vintage RE projects remain at $4 levels with non-RE VCUs valued at around $2.25. Exotics are commanding a $0.50/$1 premiums.
Gold Standard VERs are trading at between €6-€10 with African projects drawing the greatest interest.
US CAR CRT market activity remains rampant with high demand leading to proponents purchasing projects in early development stage. Interest remains for 2009 – 2013 5-year strips, trading at between $7/$8 levels. On exchange, the CCX CAR-CRT Futures DEC 10 year non vintage specific strip settled at $4.95 unchanged on the week with no volume posted. While the CCX CAR-CRT Dec10-Dec15 vintage 09 strip settled at $6.74 unchanged on the week also with no volume posted.
Privately negotiated CFI deals for the week:
2,100 tonnes Ag Soil traded $2.00
105,000 tonnes Landfill Methane traded $0.85
100,000 tonnes US Forestry traded $0.80
The Dec09 secondary CER contract closed the week up around €0.60 cents at €13.40. Utilities and Banks were active buyers with allowance auctions and higher oil prices driving bullish market sentiment.
Australia’s parliament last week approved a Renewable Energy Bill setting targets of 20% electricity generation from renewable sources by 2020. The inter party cooperation is seen as a positive step towards a low carbon economy despite the Labour government conceding to the opposition by de-linking the bill from domestic ETS legislation while boosting financial assistance and introducing safeguards to high emitting industries. The renewable laws are scheduled to begin 2010 with a target of 45,000 GWh by 2020, 75% higher than current output. Climate Change Minister Penny Wong also stated that Australia and New Zealand are in discussions to harmonise emissions schemes. The 20% renewable target matches the EU’s benchmark set in 2007.
The CFTC proposed increasing federal oversight of the CCX’s carbon contract (the CFI). CFI’s could become the second contract subject to the CFTC’s new authority. The agency boosted oversight of ICE natural gas last month after it determined that contract played a significant role in price discovery.
French airlines may lose their free EU allowances for failing to submit carbon monitoring plans required by the EU commission. Up to 250 of the 850 carriers may fail to deliver plans by 31 August making it unlikely they will be able to monitor emissions from 2010. The data will be used to allocate allowance for the ETS beginning 2012. French operator numbers have swollen by 50% with government, military and overseas airlines joining the list since the start of 2009. Only airlines that fly fewer than 243 flights every 4 months or emit less than 10,000 tonnes of CO2 p.a. are excluded from the scheme. France has delayed the submittal of plans to September, Germany to October and Sweden to October while the UK has also deferred its deadline.
VER Statistics
Source: APX; CCX; CAR; Markit
APX GS Registry: 117 (+3) Projects Listed
APX VCS 45 (+2) Projects with Issued VCUs
Markit VCS Registry 44 VCS (+0) Public View Projects
CCX CFI weekly volume 189.5kt (+130,500kt)
CAR: 56 (+3) Projects Listed; 1.62Mt CRT issued
CDM Statistics
Source: UNFCCC
Total Issued CERs: 322.14Mt Issuances: 1218
Total CERs Requested: 4.9Mt Host countries: 57
Registered Projects: 1782 (+17) Requests: 118
Nine individuals have been charged over VAT carbon trading fraud. UK tax authorities targeted a network of organized crime indulging in ‘carousel’ or ‘missing trader’ fraud whereby VAT free goods are imported from EU member states and are later sold with VAT charge added but the trader disappears not having paid state tax. Suspicions were raised in May after large volumes of spot allowances traded on bluenext. French, UK and Dutch authorities removed VAT from carbon trading to counter fraud.
To request live project pricing information or to discuss any of the above, please contact Grattan MacGiffin or Gareth Turner in London on +44 20 7144 5780; Mary Haskins in New York or Akshat Jaswal in Singapore
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