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VER activity was slow with the majority of market participants attending an industry conference in Amsterdam midweek. The volume gap remains with demand either for large volumes of industrial VCUs at $0.50-$1 or small clips of exotic recent vintage issued VCS2007 credits at $4-$5. Interest in small volumes of CRTs and US VCUs are beginning to resurface. CRTs are $6/$7 bid/offered with US VCUs $4.50/$6 bid/offered. No transactions were reported on the CCX during the week, continuing-on from a very quiet February. With all the CFI spot contracts at $0.10 there is little incentive to trade. Privately transacted negotiations of offsets are fetching higher prices, typically between $0.50 to $1 depending on the project type and location, however no volume was reported during the week. German GHG emissions fell 8% in 2009, dropping by 81 million tonnes. The decrease leaves the country‟s reductions at 28.7 % below 1990 levels, providing a surplus of 96 million Kyoto emission rights. Environment minister, Norbert Rottgen stated that the reductions resulted from the economic crisis rather than climate measures. Japan‟s tough climate change legislation, to enforce a cut in GHG emissions by 25% from 1990 levels by 2020, is hanging in the balance following a government rift over a cap and trade system. Prime Minister Hatoyama wants the inclusion of nuclear power to achieve the country‟s CO2 reductions while the coalition Social Democratic Party has asked for the removal of nuclear energy from the bill and a stop to further building of reactors. Japan is the world‟s 3rd biggest nuclear generator with 54 reactors and 14 additional power stations to be constructed by 2030. Further the environment ministry favours volume caps on emissions while the Ministry of Economy, Trade and Industry - under pressure from companies - wants caps per unit of production. This would allow emissions to rise on increased output allaying fears of GHG regulation restricting growth. The latest climate bill draft makes no mention of cap and trade and plans for a succinct draft by March 5th were delayed due to deep government divisions. A UN panel approved two CDM methodologies, including the reduction of emissions from energy-free water purifiers in India and an industrial gas project in Indonesia. The projects will generate over half a million CERs by the end of 2012. Rejected methodologies included energy efficiency in a South African cement plant and new technology in pig iron production in Vietnam. 11 new CDM methodologies were deliberated on with seven deferred until a later date. UNEP Risoe cut supply estimates of CERs to 2012 by 1.5%, to just over 1 billion tonnes following slow project approval. The CDM has 2,067 registered projects of which only 666 have issued credits. |
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