UN Greenhouse Gas Credits May Drop Close to Zero, Orbeo Says
United Nations emission credits may drop close to zero this year before a possible rebound after 2015, according to Orbeo.
Projects and investors with UN greenhouse-gas credits known as Certified Emission Reductions are selling them as quickly as possible, said Dorothy Denis, senior manager at Orbeo, also known as Solvay Energy Services.
“We see people are dumping CERs,” Denis said today at a conference in Bangkok. “It may be bad by the end of the year. We think prices may fall close to zero.”
The price of CERs for December has plunged 85 percent in the past year because of an oversupply of credits. It’s possible that prices could rise to 10 or even 20 euros ($13 to $26) a metric ton after 2015 if some carbon markets are linked as part of a global agreement, Denis said. Still, the outlook for demand and prices is unclear, she said.
December credits advanced 4.1 percent to 1.01 euro a ton on the ICE Futures Europe exchange in London at 10:27 a.m. Offsets may stay low for about three years, Edward Immanuel, senior manager of carbon and sustainability at Asia Carbon Global, said today at Bangkok conference.
“We don’t see any spike in the credit price in the next three years unless there are policy changes on the demand side,” Immanuel said. “So better sell it now.”
The supply of CERs in the eight years through 2020 will be about 7.1 billion tons, according to Jacopo Visetti, director and head of trading and carbon finance at AitherCO2, a London broker. Demand may reach 1.8 billion tons, 74 percent of which will come from compliance with the European Union carbon market, Visetti told the conference. About 20 percent of demand will come from buyers in Australia and South Korea, he said.
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