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UN Supply of CER Emission Credits May Dry Up in July on New Procedures
The United Nations Framework Convention on Climate Change may supply no Certified Emission Reduction credits for the rest of the month as it adopts new procedures.
“We expect issuance to return to the usual level of fluctuation by the end of July,” said UNFCCC spokesman David Abbass in a telephone interview today. The new procedures are expected to boost the supply of credits starting in August, he said.
The Bonn, Germany-based secretariat and the UN’s Clean Development Mechanism Executive Board introduced new rules to speed registration of projects that get emission credits and ease approvals. Each batch of credits issued for registered projects must pass through a separate regulatory process. The CDM is the world’s second biggest carbon market after the European Union program.
No CERs were issued since June 29, according to UN data compiled by Bloomberg. A total of 3.4 million metric tons were issued in June, down from 20.4 million tons in June 2009.
The UNFCCC has issued 421 million tons of CER credits since October 2005. They would be valued at 5 billion euros ($6.3 billion) based on today’s benchmark price of 11.85 euros a ton on the European Climate Exchange in London as of 12:16 p.m. They are up 1.3 percent today and 7.9 percent this year.
The premium of December CERs over the same-month contract for 2012 rose 2 cents, or 5.4 percent, to 39 euro cents a ton on the ECX. That’s the widest spread since June 11.
The regulator is seeking to clear a backlog that surged to 360 cases by March from 170 in 2008, the board said in a plan published May 28. Credits from the CDM can be used in the European market. The UN program governs projects in developing nations such as industrial-gas-destruction plants and windfarms that generate tradable offsets.
There are 227 projects requesting issuance that are “awaiting scheduling,” according to the UNFCCC website. The UNFCCC expects to do “completeness checks” on six requests for credits today, the site shows.
To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net
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