Tag Archives: climate
UK Woodland Carbon Code launched on Markit Registry
18 JULY 2013NEWS RELEASE No: 16000 UK Woodland Carbon Code launched on Markit Registry The United Kingdom’s Woodland Carbon Code (WCC) has been launched on the Markit Environmental Registry, enhancing transparency and accountability in the trade in British Woodland Carbon Units. Carbon dioxide (CO 2 ) sequestered, or absorbed, by WCC-validated woodlands in the UK can be traded, and the development enables changes of ownership of each tonne to be tracked. The registry will also record when projects are registered and credits are listed, and when carbon units have been “used” by a company in its carbon account. Forestry Minister David Heath, who spoke at the launch event in London, said, “The Woodland Carbon Code provides an authoritative means of assurance to those who wish to invest in new woodland planting to compensate for some of their unavoidable greenhouse gas emissions. By investing in new woodlands validated as meeting the code’s standards, they receive assurance that their investment will be wisely spent on well managed, sustainable woodlands which really will deliver the carbon benefits claimed.” Units of carbon sequestered by Code-validated woodlands are accurately measured and recorded by a robust carbon-accounting system, and Mr Heath added, “The Code’s launch on the Markit Environmental Registry takes that process an important step further by allowing anyone to see who owns individual units of carbon. It also tracks changes in ownership and, importantly, use of carbon units. “It also adds assurance to carbon buyers by tracking forwards sales of carbon units in long-term woodland carbon projects. This brings welcome clarity, transparency and accountability to the developing woodland carbon market in the UK. “By enhancing the attractiveness of private investment in woodland establishment, this initiative has the potential to make a valuable contribution to our priority goals of growing the rural economy and improving the environment for everyone.” Kathy Benini, managing director of the Markit Environmental Registry, said: “It is an honour to work with the Forestry Commission and provide the infrastructure for this important initiative. “Our registry is a centrepiece of environmental programmes worldwide, and we look forward to providing the tools needed to create a transparent and efficient market for credits in the innovative Woodland Carbon Code programme.” The Markit Environmental Registry also provides an introductory mechanism for bringing together buyers and sellers of woodland carbon units, although it is not a trading platform. The WCC is administered by the Forestry Commission, and further information is available from www.forestry.gov.uk/carboncode . The Markit Environmental Registry provides infrastructure to the global carbon, water and biodiversity markets, enabling participants to track environmental projects, and issue, transact and retire serialised environmental credits. It lists 150 million environmental credits across 20 market-based standards and programmes for users in nearly 80 countries. Further information is available from www.markit.com . NOTES TO EDITOR: CO 2 is the most common of the greenhouse gases causing the atmospheric warming which is changing Earth’s climate. Growing trees sequester, or absorb, CO 2 from the atmosphere, and use carbon atoms to form wood while emitting oxygen back to the atmosphere. From April 2013, UK-quoted companies have been required to report their gross CO 2 emissions. Under the Government’s Environmental Reporting Guidelines (including greenhouse gas emissions), all companies have an opportunity to report verified carbon units created through carbon sequestration in WCC-verified woodland creation projects. (Validated projects must be ‘verified’ after five years, and then at least every 10 years to check that sequestration targets are being met.) Companies can invest directly in woodland establishment projects on their own land, or by buying the rights to the carbon sequestered in woodlands established by others. They can buy units before they are created and verified, but they cannot report them until after they have been verified. Traders of woodland carbon must be registered with the Financial Conduct Authority. A total of 133 projects were registered (notified intention to seek validation) under the code at 30 June 2013, covering an area of 14,200 hectares and projected to sequester 5.2 million tonnes of CO 2 . Of these, 42 had been validated, covering 2100 hectares and projected to sequester 1.0 million tonnes of CO 2 , comprising 256,000 tonnes in England, 662,000 tonnes in Scotland and 33,000 tonnes in Wales. No projects have yet been validated in Northern Ireland. When companies ‘use’ verified units of CO 2 , for example, in an annual environmental report or in claims of carbon neutrality, this is demonstrated in the registry by moving units to their ‘retired’ (or used) account. Projects can only be validated under the Code if they meet its rigorous requirements for sound forest management, sustainability and carbon ‘accounting’. Project proposals are audited by independent certification companies approved by the UK Accreditation Service. Once registered, a proposal is audited against the standards required by the Code, and if it satisfies the requirements it is ‘validated’. Validation provides evidence of the quality of the proposal, not only in carbon terms, but also in sustainable forest management terms, and is critical for attracting investors. Woodland established under the Code must attain high standards of forest management in line with the UK Forestry Standard (UKFS) and its associated Climate Change Guidelines for Forestry. The UKFS sets out the government vision of sustainable forest management, and is the ‘yardstick’ used by all four governments in the UK when assessing applications for forestry grants, tree felling licences and approvals of forest design plans. About 13 per cent of the UK’s land area is covered by woodland, which is more than double the woodland cover of 100 years ago. MEDIA CONTACT: Charlton Clark, 0131 314 6500 e-mail: charlton.clark@forestry.gsi.gov.uk Continue reading
Carbon Supply Crunch Set to Extend Longest Rally: Energy Markets
By Alessandro Vitelli July 18, 2013 The longest-ever rally in United Nations carbon prices shows little sign of easing as traders bet companies running emission-reduction projects will stop creating credits because it’s no longer profitable to do so. UN-approved Certified Emission Reductions, or CERs, for December have more than doubled to 49 cents (64 U.S. cents) from a record low in April on the ICE Futures Europe exchange. It costs a combined 50 to 80 cents a ton to have emission cuts at clean-technology projects verified and the corresponding certificates issued by the UN, said Luca Bertali, an emissions broker in London at TFS Green, a unit of Cie. Financiere Tradition SA, one of the largest inter-dealer brokers. Prices for the credits used by 34 of the richest nations from Germany to Australia to offset domestic emissions by investing in greenhouse-gas-reduction projects elsewhere tumbled 98 percent since peaking at 23.38 euros in 2008 as the global economic slowdown cut demand. The number of CERs being issued by the UN in 2014 may drop 23 percent from this year, according to Bloomberg New Energy Finance. “Unless the price of CERs covers the costs of verification and the UN share of proceeds, people aren’t going to deliver them,” Bertali said in a telephone interview. “We’ll see the result a year from now.” UN contracts climbed to a seven-month high of 56 euro cents a ton on July 3, when the European Parliament approved a plan to reduce the region’s record surplus of permits and buoy prices that had dropped to all-time record lows. They closed at 49 cents on the ICE Futures Europe exchange in London after seven weeks of gains, the longest streak since they were first offered in March 2008. CDM Support The UN’s Clean Development Mechanism, set up by the 1997 Kyoto Protocol, has supported the development of more than 6,900 projects in 87 countries and was worth 6.6 billion euros last year, according to New Energy Finance. Falling UN and European Union carbon prices shrank the value of emissions traded worldwide by 36 percent to 61 billion euros last year, New Energy Finance said in a January report. Investors in CDM projects get CERs that they can sell to companies and governments with pollution caps. The EU allows emitters to use UN offsets to comply with obligations in its cap-and-trade program, the largest in the world. One credit is equivalent to a one-ton reduction of carbon dioxide. One such investor is the Climate Cent Foundation, a group formed by the Swiss Petroleum Federation, the Swiss Trade & Industry Federation and the Swiss Road Traffic Federation, which buys CERs from a 15 megawatt hydroelectric plant in Peru, according to the United Nations Framework Convention on Climate Change, or UNFCCC. The facility is designed to generate 42,000 CERs a year for as many as 21 years from July 2009, which can be used to meet emission caps. Unbuilt Projects The low UN carbon offset price may mean new emission-reduction projects won’t be built or existing facilities are dismantled, according to Renat Heuberger, chief executive officer of project developer South Pole Carbon Asset Management in Zurich. “It’s going to be a significant amount,” he said July 12 in an e-mailed response to questions. “For example, in the landfill and biogas space there is no point keeping the collection systems in place if CER prices are so low.” CER supply in 2014 will total 260 million tons, down from the record 339 million supplied in 2012, according to New Energy Finance. July issuance of CERs will be 12.5 million tons, the fourth consecutive month of declines and the lowest since February, according to UNFCCC data. The UN regulator has issued 202 million credits this year. Limited Gains UN credit price gains may be limited because of caps on demand for existing and future certificates together with oversupply. Market rules will restrict European demand for CERs from 2013 through 2020 to 578 million tons, compared with an immediately available supply of about 500 million tons, according to New Energy Finance. Any shortfall will be met by future issuance, which may be as much as 1.3 billion tons through 2020. “There’s a total of about 500 million tons of offset supply in the market at the moment that hasn’t been submitted as part of compliance,” Richard Chatterton, an analyst at New Energy Finance in London, said by phone on June 19. “That’s a huge overhang, which could push the price back below the cost of issuance.” Trading volume in CER futures has dwindled this year to 10 million tons a week on average, a 67 percent slump from 2012, according to ICE Futures data. This decline in activity is contributing to price volatility as there are fewer parties available to buy or sell at a given time, said Fred Payne, a carbon trader at CF Partners (U.K.) LLP, a risk advisory and investment firm specializing in renewables and commodities. “If you want volume, you’re going to have to pay the offer price, and that’s squeezed prices higher,” Payne said in a July 3 phone interview. Price Recovery Project owners and investors may still be generating CERs on expectations that prices will recover, according to Trevor Sikorski, a London-based analyst at Energy Aspects Ltd. By issuing credits now, they can profit from an increase in price, he said July 12 by e-mail. “It’s hard to understand why issuance occurs at prices below 0.50 euros, which either suggests enough projects have issuance costs below that or you have some project developers that are happy to punt on the CER price going higher,” said Sikorski, a former head of carbon analysis at Barclays Plc. “I think that this would be relatively odd behavior unless you had very deep pockets and a high risk threshold.” To contact the reporter on this story: Alessandro Vitelli in London at avitelli1@bloomberg.net To contact the editor responsible for this story: Rob Verdonck at rverdonck@bloomberg.net Continue reading
Voluntary Carbon Credits Are Healthier Than Compliance: Jonathan Shopley
Wednesday, Jul 17, 2013, 12:07 IST | Agency: DNA R N Bhaskar Jonathan Shopley, MD at The CarbonNeutral Company, a global provider of carbon reduction solutions to more than 350 companies, was the founding co-chair of The International Carbon Reduction and Offset Alliance, an industry body committed to defining and meeting the best practice in the carbon market, and is a board director of the Climate Markets and Investors Association. Jonathan Shopley He has authored publications across a range of topics including climate change, environmental management and sustainable development. In this interview with R N Bhaskar, Shopley speaks about his work and what he expects from the markets. Excerpts: How big is the volume of business you do? Last year, we traded in around 11 million units of carbon, of which 2.2 million – approximately 20% – came from India. We see the markets changing. With the fall in carbon credit prices, thanks to the global economic slowdown, we see credits purchased and retired for corporates a better option than the compliance market driven by the Kyoto Convention. We see the non-regulatory action on climate, the voluntary market, growing at around 4% annually, even where the compliance market has crashed. This is to be expected, because as political will weakens, leading corporates – like Microsoft with whom we work worldwide – invariably step in. We see the private sector playing a critical role both in policy and market development, and even influencing regulation. What about global markets? As a survey by Ecosystems Marketplace, a Forest Trends Initiative, points out, voluntary demand for carbon offsetting grew 4% in 2012, when buyers committed more than $523 million to offset 101 million metric tonne of greenhouse gas emissions. The European private sector, including regulated energy utilities, was the market’s biggest voluntary buyer – seeing demand grow 34% to 43.4 million tonne of offsets even in the face of significant challenges to Europe’s mandatory carbon market. US-based corporations offset more emissions than buyers in any other single country, at 28.7 million tonne. A little over a third of offsets purchased by US buyers (9.7 million tonne) were obtained for future use in California’s emerging cap-and-trade programme. The survey also reveals that last year, voluntary buyers paid a volume-weighted average price of $5.9/tonne – slightly down from 2011’s $6.2/tonne. But it was significantly higher than the United Nations’s regulatory carbon offset price at less than a $1/tonne. How big is your organisation? Our headline numbers are that we have 35 people, 340 clients located in 34 countries. All our clients are carbon-neutral, but want to do more. We have 200 projects that are supported. As mentioned earlier, we have done around 11 million tonne of carbon last year. And we are likely to get more active in India. Recently, we purchased a lookalike company in New York. Continue reading
