UN Industrial-Gas Carbon Offset Supply to Quadruple in October

Supply of United Nations carbon offsets from industrial-gas projects is set to almost quadruple in October as 10 projects applied to receive credits from tomorrow through Oct. 31.

The projects, which reduce greenhouse-gas pollution from hydrofluorocarbon-23 and nitrous oxide produced in the manufacture of adipic acid, requested 10 million Certified Emission Reductions, or CERs, compared with a total of 2.4 million tons in September and 3.9 million metric tons in August, UN data show.

The executive board of the UN’s Clean Development Mechanism, the body responsible for regulating CERs, is scheduled to deliver a total of 28 million tons of credits this month, compared with 14.5 million in September, according to UN data compiled by Bloomberg. That’s the biggest monthly volume since January and the seventh-largest on record, the data show.

Credits from HFC-23 and nitrous oxide projects will be banned in the European Union from April. These two project types account for more than 60 percent of all offsets issued since the market began.

Prices for UN offsets for December fell to a record 1.43 euros ($1.85) a ton on Sept. 18 after total supply of CERs reached 1 billion tons a week earlier. They declined 1.4 percent at 1.92 euros at 2 p.m. London time. The flow of offsets has also helped depress prices for EU carbon permits, which reached a record 5.99 euros on April 4.

The flow of credits in November will probably rise compared with October, the UN data show. The CDM board is scheduled to issue 18.4 million new credits between Nov. 1 and Nov. 7, according to a timetable of requests for issuance on the UN website. That includes a further 13 million CERs from industrial gas projects.

CERs are generated by clean-technology projects in developing countries that reduce pollution compared with a business-as-usual scenario. Factories and power stations participating in carbon markets in the European Union, Australia and New Zealand may use CERs to meet part of their cap on greenhouse-gas emissions.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE