The United Nations delivered the last set of Certified Emission Reduction credits eligible for use in the so-called second phase of Europe’s carbon trading market, the world’s largest.
The UN Clean Development Mechanism has supplied CERs covering emissions totalling 1.3 billion metric tons of carbon dioxide equivalent since 2005, according to its website. The next scheduled issuance is for May 1, the day after the deadline for factories and power stations in the European Union to surrender credits and EU permits matching their verified emissions in 2012.
The European Commission, the bloc’s regulator, set a 1.4 billion-ton cap on the use of UN offsets to meet emissions targets in the five years through 2012, known as Phase 2, and a limit of almost 1.8 billion tons from 2008 through 2020.
The CERs, plus the 793 million tons of so-called emission reduction units issued under the UN’s Joint Implementation offset program, means the supply of eligible credits today exceeds the EU’s five-year limit by 57 percent, UN data show. The surplus, along with an oversupply of permits issued by EU member states, pushed prices for CERs to as low as 1 euro cent ($0.013) a metric ton on April 24 on ICE Futures Europe exchange. They were at 4 cents as of 1:18 p.m. in London today.
CERs and ERUs may also be purchased and used by governments in developed countries that have to meet limits on their emissions under the Kyoto Protocol.