Eneco Holding Teams Up With Ramp as Australia Switches on Carbon Trading
Eneco Holding NV, the third-biggest utility in the Netherlands, has joined with a two-year-old startup in one of the first ventures to sell international emission offsets to Australian companies.
Ramp Carbon Pty Ltd., a Melbourne-based developer of projects in Latin America and South Africa to reduce greenhouse- gas emissions, announced its partnership with Eneco a day after Australia passed a law that will require almost 500 of the country’s largest emitters to pay for their pollution for the first time. The law allows firms to offset as much as half of their Australian discharge by purchasing credits awarded for projects that limit carbon releases abroad.
“This has opened up the market in Australia,” Ramp Director Phil Cohn said in an interview from Melbourne. “We believe that this is the first offering of its kind.”
Australia’s emissions market is forecast to be as large as the one planned in California and the second biggest after Europe’s, according to Bloomberg New Energy Finance. It is disputed by the Minerals Council of Australia and opposition leader Tony Abbott, who has vowed to overturn the program if he wins the next election.
Prime Minister Julia Gillard’s Clean Energy Futures plan is nevertheless set to become law on July 2012, setting a cost of A$23 ($23.80) on each metric ton of greenhouse-gas emissions linked to climate change. The carbon levy is fixed until 2015, when Australia begins a so-called cap-and-trade system to let the market set the price as emitters buy and sell permits.
‘Very Good Buy’
Miners, energy producers, utilities and others bound by the new law also have the option of importing emissions credits from less-developed countries such as Mexico and China via the United Nations’ Clean Development Mechanism. UN offset, known as Certified Emission Reductions, closed yesterday at 6.85 euros ($9.27) on the ICE Futures Europe exchange in London. That’s less than half Australia’s fixed price in 2012.
“The price of offsets is very low at the moment,” said Cohn, 34. “Australian companies that are willing to take a position may be getting a very good buy.”
COzero, based in Sydney, and Climate Bridge Ltd., based in Melbourne and Shanghai, are other companies moving to capitalize on the new opportunities in Australia.
COzero, a four-year-old company that has developed about 30 offset projects in China, will reopen its office in Beijing after closing it last year when Australia scrapped an effort to set up a cap-and trade system, said Chief Executive Nicholas Armstrong. While COzero has suspended developing new projects in China amid the global oversupply of UN credits, Armstrong, 27, is “bullish” on the prospects for packaging and selling existing credits to Australian buyers.
‘Start Learning Mandarin’
Alex Wyatt, CEO for Climate Bridge, is focusing on creating new UN credits for Australian buyers. The company has developed almost 200 emission reduction projects, mostly in China.
“There’s a real opportunity to move early,” said Wyatt, 35. “Start learning Mandarin,” said the CEO, who studied the language at Oxford University in England.
While COzero and Climate Bridge have focused on China, Ramp Carbon is offering Australian credits derived from 15 emission- reduction projects in Latin America as well as Vietnam, India and China. Most of the projects were developed by Eneco Carbon Desk, the energy-trading arm of the Rotterdam-based utility.
“This initiative will ensure that Australian carbon-market players get access to carbon credits, enabling them to reduce their costs of compliance,” said Mark Meyrick, Eneco’s head of carbon.
Australia, which burns coal to produce about 80 percent of its electricity, voted to put a price on carbon to help the country cut emissions by 5 percent as of 2020.
Envoys from 190 nations meet for two weeks beginning on Nov. 28 in Durban, South Africa, to discuss climate rules. While the U.S. doesn’t have a national emissions trading system, the state of California will start a trading system in 2013.
“We will go to Durban, another step along the road internationally, and the focus will be on international carbon markets,” Gillard said yesterday in Melbourne.
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