News that European companies could be banned from using carbon credits from some controversial large-scale offset projects resulted in Certified Emissions Reductions (CERs) prices rising to a four-month high today, according to data from energy market intelligence provider ICIS Heren.
On Wednesday the EU issued a statement saying it had taken a first step to restrict the use of carbon credits from large-scale industrial projects, prompting Isabel Save, carbon editor at ICIS Heren, to comment: "If the EU bans all industrial carbon credits, the supply of credits would drop by around 75 per cent."
ICIS Heren says that these large-scale offsets schemes have come under fire from green groups, which say they actually raise emissions instead of cutting them — the claim being that companies can make money from inflating their output and selling carbon credits, even when demand for their products is falling. ICIS Heren data shows prices in the over-the-counter market rising to 13.55Euro per tonne of CO2 for UN-backed carbon credits.
Any new EU restrictions would come into place at any point after 2013. Project lead times mean that investors need to know at least three years in advance what type of credit will be allowed in the EU emissions trading system before committing any money, says ICIS Heren.
