United Nations efforts to speed up issuance of carbon offsets by accepting electronic transfer requests won’t be enough for some emitters to meet a European Union compliance deadline, project developers said.
The changes are “unlikely to have a very significant impact on meeting the deadline because the forwarding process is only one small part of the much longer verification and issuance process,” Gareth Phillips, chairman of the Project Developer Forum, said by e-mail from Singapore yesterday.
The UN’s Clean Development Mechanism, which oversees the supply of Certified Emission Reductions, told stakeholders last week that requests for credits to be forwarded to national registries can be made electronically. The change, one of two, followed an “an enormous influx” of project registration requests at the end of 2012, David Abbass, a CDM spokesman, said by e-mail Feb. 26.
It typically takes at least five months to issue new offsets, which represent greenhouse-gas reductions that compensate for emissions made elsewhere. Buyers who need CERs to meet their caps in the EU’s emissions-trading system for 2012 must get their offsets before April 30, so they can transfer them to the bloc’s registry account.
CERs for December closed 2 euro cents higher yesterday at 37 euro cents ($O.48) a metric ton on the ICE Futures Europe exchange in London. They fell to a record 28 cents on Jan. 21.
The CDM secretariat said in its letter to stakeholders that project owners and investors forwarding CERs no longer need to submit a hard copy request signed by all project participants. This process can take as long as 10 days, Phillips said.
“The ‘fast-tracking’ is only a capacity for electronically submitting forms instead of sending them via physical mail,” Abbass at the UN said. “There has been no change in the board’s procedures and the issuance process prior to forwarding remains as it was.”
The CDM board will also allow owners and investors to pay issuance fees in advance of the delivery of credits, instead of waiting until they’re issued before paying the charge. This may save from three to five days, Phillips said.
“PD Forum has been requesting the secretariat to accept pre-payment of issuance fees since 2008 and now they have finally implemented this option, albeit on a temporary basis, we would ask them to extend it permanently,” he said.
The changes don’t represent a short-cut in the way the emissions reductions are verified, the UN’s Abbass said.
“There has been no change in the board’s procedures and the issuance process prior to forwarding remains as it was,” he said.
The Project Developers Forum said in a letter to the UN and published on its website yesterday that while the changes were welcome, more must be done to bring CERs to market faster.
The time the UN takes to verify and check the accuracy of paperwork, known as the information and reporting check, should be cut from its current 23 days, according to the forum. Also, the 28 day-review of an auditor’s verification is unnecessary when the CER issuance isn’t the first for a project.
“If we reduced the issuance process, we could save four weeks or more” in the time investors wait for their offsets to be delivered, Phillips said.
The EU’s April 30 compliance deadline is also the last opportunity for some investors to surrender offsets from projects that reduce hydrofluorocarbon-23 and nitrous oxide emissions. Credits from the two technologies will be banned in the EU market from May 1.
Requests for CERs from these project types total 21.7 million tons scheduled for issuance through March 27, with a further 6.5 million tons in preliminary stages, UN data show.