Carbon News
The EU Will Exceed 20% Green Energy Target
A report by the European Wind Energy Association (EWEA) has found that the European Union (EU) will exceed its target of meeting 20% of its energy needs from renewable sources by 2020.
Out of the 27 member states, 25 expect to meet or exceed their national targets, EWEA said, based on its analysis of national action plans submitted by EU governments to the European Commission.
"Taken together, the action plans show that the EU-27 will meet 20.7 percent of its 2020 energy consumption from renewables," said Justin Wilkes, policy director at EWEA.
Spain has said it is expecting to surpass its goal by 2.7% and Germany by 1.6%. Luxembourg and Italy, which are predicted to fall short of their national targets by 2.1% and 0.9%, said they plan to import renewable energy from other countries to make up the shortfall.
This shows the growth in the environmental markets, despite the global downturn of the past few years. The carbon credit markets will continue to grow as the target dates near.
BA: Biofuels Will Cut Emissions
The Head of Environment for British Airways has said that biofuels have a growing role to play in cutting carbon emissions in the aviation sector, and could save airlines millions of Euros in carbon costs.
BA is one airline which already offers its passengers the opportunity to purchase carbon credits to offset emissions caused by their flight, and are looking to lead the way in the continuing environmental focus of the aviation industry.
From January 2012 aviation will come under the European Union Emission Trading Scheme (EU ETS), which will force companies to buy permits for each tonne of carbon they emit.
"We said biofuels could cut carbon emissions by 10 percent by 2050. My personal view is 20 percent by 2030 for the global aviation industry," Jonathon Counsell said at the Reuters Climate Change and Alternative Energy Summit.
From the three main processes for biofuel -- from waste biomass, crop, and algae -- Counsell said waste biomass was the most attractive.
"Biomass to liquid is the obvious start because we have lots of waste available. The technology's there and it's approved to be used in aircraft with the right processing, up to 50 percent of the mix," he said.
Forest Projects Move Forward
International projects generating voluntary carbon credits by protecting forests are moving forward, emissions markets developers said.
Many delegates at the 190 nation talks that go on until December 10 at a resort in Mexico are trying to push forward a program called reduced emissions from deforestation and degradation, or REDD, because forest destruction releases up to 17 percent of mankind's carbon emissions.
Norway and other rich countries have pledged nearly $4 billion since last year to help set up the program. It would bring forestry deals to national carbon markets allowing investors to reward developing countries like Brazil, Indonesia and the Democratic Republic of Congo for protecting tropical forests from development.
David Antonioli, the chief executive of the Voluntary Carbon Standard, which develops quality standards for emissions markets, said at a business meeting near the U.N. talks that projects covering hundreds of thousands of acres of global forests are already generating voluntary carbon credits.
Some 32 million acres (13 million hectares) of forests were lost or destroyed each year of the last decade, according to the U.N. Food and Agriculture Organization's Forest Resources Assessment 2010.
EEX Sets Trading Expansion Priorities
The European Energy Exchange said expanding its carbon-dioxide trading is a priority as the European Union moves toward auctioning permits in the world's biggest such market.
EEX, based in Leipzig, Germany, is continental Europe's largest energy exchange for emission rights, power, natural gas and coal. The platform started handling carbon sales for Germany's Environment Ministry this year and is preparing to take part in a tender to become an operator for the planned EU auctions in 2013, Managing Director Oliver Maibaum said.
"Our top priority is to play a bigger role in the carbon market," Maibaum said today in an interview at the EMART conference in Amsterdam. "The volumes will be bigger after the EU starts auctioning. This already attracts many players and the feedback from our traders is that there's more potential."
The EU, which has given away the majority of allowances since its emission-trading system started in 2005, will require most emitters to buy their permits when its third phase starts in 2013. The bloc will auction about 60 percent of the total in the first year and increase the proportion in following years, according to estimates from the European Commission.
The cap for CO2 discharges for 2013 has been set at 2.04 billion tons, valued at about 31 billion euros at today's price. This limit includes aluminum and chemical makers that join the program in the third phase. An adjustment is also planned for airlines that will become part of the system from 2012.
Maibaum said the EEX was in negotiation for more market makers to boost liquidity from its current four in each gas and power trading and two for carbon. The exchange plans to add time spreads for EU carbon allowances to its current offer of spot and futures.
Africa to get Carbon Trading Hub
Kenya is planning to create a carbon credit trading market in order to help drive greenhouse-gas emissions reduction activity within the country and across Africa.
The government is creating a carbon offset trading platform to help kick-start foreign investment in renewable energy and forestry projects under the UN’s CDM mechanism.
Kenya’s largest forest and water areas, the Mau and Aberdares, are believed to have the potential to deliver billions of dollars in avoided deforestation credits for preserving and restoring these natural assets. The Mau forest has been reduced by 40 per cent in recent decades due to logging and land-clearing, and carbon credit trading will help reduce this.
The UN CDM has seen more than 5000 projects developed around the developing world over the last six years, but Africa has largely missed out with less than 150 getting off the ground. Kenyan authorities say the trading platform could make Nairobi a carbon trading hub in such projects for the whole continent.
The government has established a carbon finance unit in the Ministry of Finance and says the country’s public debt could be paid off with carbon revenues in six years, according to the head of the Carbon Financing Unit, Erastus Wahome.
China Enters Emissions Trading
The EU has begun advising Beijing on the establishment of an emissions trading market in China in order to cut greenhouse-gas emissions.
The entrance of the world’s second largest economy into the carbon market will boost the size of the market and help it grow.
Officials from China’s National Development Reform Commission (NRDC), the government’s central economic planning agency, met with EU climate officials over two days in Beijing recently, according to the China Daily.
The EU operates the world’s largest carbon emissions cap and trade scheme issuing tradable permits for two billion tonnes of CO2 emissions per year from 11,000 high-emitting power and manufacturing installations.
Jos Delbeke, director-general of the European Commission’s climate office in Brussels said his team shared the experiences and expertise gained from the EU ETS and the two delegations discussed the operational details of a carbon system.
China has a target to reduce the emissions of its economic output by up to 45% by 2020.
Higher Emissions Targets May Push Credits to $175 a Ton
The head of the International Energy Agency has said that the price of carbon credits is still too low, and must rise to $175 a metric ton in order to halve global emissions by 2050
The European emissions trading program, the world’s largest carbon market, isn’t providing a reliable guide on the cost of pollution to promote more investment in renewable energy and other emission-cutting technologies, Nobuo Tanaka, executive director of the Paris-based agency, said in an interview in Singapore today.
"It’s still too low," Tanaka said. "The current level of price is not necessarily a good reference for the usefulness of the system."
EU allowances for December 2010 delivery traded at 14.57 euros on November 1st 2010 on London’s European Climate Exchange.
"To achieve a 50 percent reduction in carbon dioxide emissions by 2050, you need it to be $175 per ton," Tanaka said. More stringent emission reduction targets would lead to higher prices, he said.
Carbon Offset Investors Have Long-Term Confidence
Investors in the United Nations' Clean Development Mechanism (CDM) now have more confidence in the carbon offset market after 2012 after the number of post-2012 carbon credit deals rose in recent weeks.
On Thursday, UK-based project developer Camco International reported for the first time that it had secured options in CERs due to be issued after 2012 because of more interest from buyers and more market transactions taking place.
"The market has evolved. There is a tangible value for post-2012 credits," Yariv Cohen, Camco's chief carbon officer, told Reuters.
In a project development update, Camco said it has contracts for a risked 28.1 million tonnes and holds contractual rights of up to a further risked 27.6 million tonnes.
This week alone saw three post-2012 deals announced.
A consortium agreed to buy 2 million pre-2012 and post-2012 CERs from a Moroccan wind farm project, while Vitol SA bought 8.5 million CERs from carbon asset manager KYOTOenergy Pte, of which 92 percent are expected to be issued after 2012.
German chemical company Lanxess invested 7 million euros ($9.67 million) in an Indian biomass project to earn post-2012 CERs, Point Carbon reported.
In September, French carbon investor CDC Climat set up a subsidiary to manage 60 million euros of investment in carbon assets, including post-2012 credits.
"Demand been up for a quite a while. People are making sure they are positioned properly for 2012," said Simon Glossop, partner at CF Partners.
EU Tightens Emissions Limits
The European Union has tightened emissions limits for 2020, which is likely to boost demand for carbon credits as governments and companies try to stay under the allowance.
The Carbon Markets & Investors Association, a lobby group of banks and greenhouse-gas-trading companies, has said it supports this adoption of tighter limits. The group would support a unilateral target of a 30 percent cut in emissions from 1990 levels by the end of the decade, the lobby said today in an e-mailed statement. The current target is for a 20 percent reduction.
The EU is setting rules this year for the third phase of its carbon market, the eight years through 2020. The second phase runs for the five years through 2012.
“The global economic downturn has had the effect of leaving many installations covered by the EU emissions trading system with an excess of Phase II allowances that can be banked into Phase III,” the association said in the statement.
Carbon Trading Increases Due to New Software
The research company IDEAglobal has developed and is now selling new software which is spurring trading and investment in emissions reductions and the carbon market.
The Carbon Rating Agency, part of the company’s IDEAcarbon unit, said its CARBONrisk software helps bring financial risk management tools to the carbon market. The software predicts supply and future prices of credits by analysing the likelihood that emissions reductions projects will be awarded with tradable credits.
Tradable UN carbon credits are awarded under the UN’s Clean Development Mechanis, to projects in developing nations that reduce the release of greenhouse gases into the atmosphere.
There has been a “general lack of liquidity,” IDEAcarbon said. The software will help to manage “delivery risk” of carbon credits to forecast a price and help attract investment into CDM projects, according to the statement.
International Aviation Companies Agree to Emissions Trading
The European Union claimed victory at an international aviation meeting, saying the participants accepted the EU’s plan to cap emissions by domestic and foreign airlines serving Europe as of 2012.
The European Commission, the 27-nation EU’s executive arm, also said the International Civil Aviation Organization reached a “breakthrough” agreement at its meeting that ended yesterday to curb global aircraft discharges of greenhouse gases beginning in 2020.
Such pollution is blamed for global climate change, which the EU is handling in part by adding airlines to its emissions trading system in less than 15 months.
Emissions from international aviation account for 2% to 3% of global greenhouse gas discharges and their share is expected to rise in the coming decades as the industry grows, according to the EU.
The EU carbon market, started in 2005, is the world’s largest. It covers about 12,000 installations that produce energy or goods ranging from paper to cement. Emitters must have an allowance for each ton of carbon dioxide they let off. Those producing more than their allowance have to buy more; those that emit less can sell their surplus.
The bloc is on track to reduce greenhouse gas emissions by 20 percent this decade from 1990s levels and said it’s ready to deepen the target to 30 percent if other countries follow suit.
United Nations Enters the Credit Market
As part of its aim to become Climate-Netural, the United Nations has recently announced that it is issuing a tender for companies to provide CER credits that comply with Gold Standard requirements. Because Gold Standard certifies that carbon credits generated from projects in both the compliance and voluntary offset markets meet sustainable development criteria, the UN has selected GS CERS to offset its emissions.
Initial contracts will be issued for 5,000 to 10,000 tones of CO2e by the end of 2010, with the possibility of extensions for offsetting an additional 2,000 to 4,000 tonnes per year over the 2.5 year period from 1 July 2009 until 30 December 2011.
Ryder Cup Event to Offset Carbon
One of the biggest events in the international golf calendar tees off on the 1st of October, and with this the organisers of the Ryder Cup have announced that the entire event, including team travel and spectators, will reduce and offset carbon emissions, producing a sustainable event.
The focus of the organisers has been to deliver a world class sporting event, whilst protecting the site and carrying the smallest possible environmental footprint. Jonathan Smith, CEO of the Golf Environment Organization added: "Greening the 2010 Ryder Cup has been a rewarding project – not just for the meaningful resource reductions that have been secured for this year's event, but also as a flagship for the many sustainability initiatives that are taking place in the golf sector."
In a bid to reduce car use, spectators are being encouraged to travel by train and car-share wherever possible, with additional public transport provided to the venue in Newport, South Wales. In a significant measure to reduce food miles, caterers have selected local producers and suppliers, and have combined their deliveries – reducing all food related transport by around 30%.
As well as the reductions, an official carbon offsetting mechanism has been agreed to make sure that all ticket holders, contractors and suppliers are able to purchase carbon credits to offset their emissions. Both Ryder Cup teams have already committed to offset the emissions arising from their travel to and from South Wales, in a further display of the rapid expansion and usage of the carbon markets.
Green Investment Bank to boost UK's Low Carbon Status
The coalition government in the UK has released details of a potential Green Investment Bank.
The released report focuses on the importance of the UK becoming a low-carbon economy, reducing emissions, offsetting carbon and investing in the growing green energy markets.
The report finds that private sector investment will be crucial in shifting the country to an eco-friendly economy.
The general secretary of the TUC commented, saying the bank would be a, "major step towards the crucial goal" of making the UK into a "world-leading green economy".
The bank has been described as carrying out investments with a social purpose as well as creating income streams for investors. Its job will be to raise the necessary equity and debt finance to fund nuclear power stations, wind farms, smart grids and other green energy projects.
The move is seen as indicating further interest in green energy investment in the UK and across the world.
Carbon Credit Prices to Increase in 2010
The International Emissions Trading Association (IETA) has projected that prices of carbon credits generated by developing countries may rise over 2010 as regulators review industrial gas projects and Chinese wind energy facilities, fueling speculation that supplies will slow.
"There are fears of a supply squeeze because of fears industrial gases will not be allowed to produce certified emission reduction credits (CERs)," said Henry Derwent, chief executive officer and president of the Geneva-based International Emissions Trading Association (IETA), in an interview ahead of the Carbon Forum Asia conference.
Demand for CERs may increase as global economies start to turn around and the outlook for growth improves, Derwent said. IETA's members include Goldman Sachs Group Inc. and Royal Dutch Shell Plc.
CERs, awarded to projects that lower emissions in developing nations, can be used to comply with the EU emissions trading system, the world's largest cap-and-trade program.
New Zealand Farmers Look to Carbon Credits
In New Zealand, sheep outnumber humans 9 to 1, and this crucial sector of the economy is now proving profitable in more then just wool and lamp chops. Sheep farmers are planting tree farms that could prove valuable when the country's agricultural sector is forced to pay for greenhouse gas emissions starting in 2015.
Prime Minister John Key's government in Wellington has said a carbon trading regime will boost the country's green credentials and clout in global climate talks. The government's carbon program is also a welcome opportunity for some sheep farmers, struggling against slumping wool prices, drought, and competition for land from the dairy and lumber industries, to diversify, says Neil Walker, a forester in the Taranaki region of New Zealand's North Island.
Although New Zealand was the world's largest sheep meat exporter last year, the number of sheep have fallen from a 1982 peak of 70 million to about 40 million, official data show. New Zealand's carbon trading system requires polluting industries to buy credits that allow them to emit certain amounts of greenhouse gases, while businesses that reduce emissions can earn credits and sell them to polluters.
Farmers who convert their land from sheep grazing to planting trees could add $172 per acre in value each year to their land holdings, says David Evison, a senior lecturer at the University of Canterbury's New Zealand School of Forestry. Forests planted for carbon credits may increase to 74,000 acres, or about 0.27 percent of all pasture and grass land a year, compared with about 8,650 acres in 2009, the government estimates. "It turns forestry into a cash-flow business," says Evison.
Edwyn Kight, a farmer on New Zealand's North Island, sees the upside from the shift to forestry. He says carbon farming could improve the profitability of hill country property if converted to tree farms. "That land is not marginally economic for raising sheep and cattle, it's totally uneconomic," Kight says from his nearly 8,900-acre Akitio Station. He's planted about 1,500 acres of forest since carbon trading began and plans almost 2,000 more.
Japanese Carbon Trading Sees Prices Soar
A pioneering domestic carbon trade in Japan has seen emissions reduction credits change hands for 12,000 yen per tonne, or U$S142, Reuters and Point Carbon report.
Tokyo's mandated emissions trading scheme (ETS) launched in April and obligates 1400 large-emitting factories and commercial businesses to cut emissions by 7 per cent overall over the four years to 2014. The scheme only covers 1 per cent of national emissions but is seen as a forerunner to a possible nationwide ETS down the track.
The Tokyo transaction was for a small parcel of credits over 22 tonnes of emissions reductions from an energy efficiency project operated by Daiwa House Industry and Taisei Rotec, Reuters reports.
The sale price is more than seven times the $19 a tonne prevailing price of allowances in the EU ETS and nine times the $16.70 a tonne for CERs, the carbon offsets generated under the UN CDM scheme.
The Tokyo trade took place via an online marketplace owned by Sojitz Corp and Smart Energy.
