The Hindu Business Line : Carbon trading market likely to stay depressed for 2 years

Country-wise emission
Countries that emitted lower levels of green house gas (GHG) include Germany, the Czech Republic, Denmark, Finland, France, the Netherlands, Slovakia, Hungary, Estonia, Belgium and Sweden. However, countries that emitted higher levels of GHGs than their allowances are the UK, Spain, Italy, Ireland and Austria.

New Delhi , May 13

Though the European Commission is yet to officially release the green house gas (GHG) emission level data for all European countries, indications available from Brussels suggest that the carbon trading market could remain depressed over the next two years, as most countries have reported improved performance.

Carbon credits are in demand when countries fail to meet emission norms as they can offset their excess emissions by buying credits.

In 2005, companies in most of the countries performed well by emitting lower levels of GHG (to a cumulative extent of over 60 million tonnes) than what they were allocated, according to data published by a European Web Site. The EC, which would officially release data on May 15, declined to comment. The Web Site was unable to get details on emission levels due to a technical snag. Some countries whose emission levels are not yet known include Cyprus, Lithuania, Luxembourg, Malta and Poland.

Countries that emitted lower levels of GHG include Germany, the Czech Republic, Denmark, Finland, and France. However, countries that emitted higher levels of GHGs than their allowances are the UK, Spain and Italy.

On Friday, prices for European carbon credits or certified emission reductions (CER) plunged to below euro 9 per CER. The per-CER prices had dipped to euro 12 levels (in April-end) when some countries reported their emissions for 2005. Each CER stands for one tonne of carbon dioxide emission reduction and can be traded. Demand for carbon credits of Indian projects:

Since the allocations to European companies in 2005 resulted in a surplus, it is unlikely that there will be European demand for CDM credits before the Kyoto compliance period (pre-2008), said Mr Robert Taylor, Director, Agrinergy. However, demand for 2008-2012 period would be known after the EC decides on allocation levels.

"As of now the EC guidance is that the allocations would be tighter by six per cent than current levels. This may not create significant demand," said Mr Taylor. "Though prices would be low in the pre-2008 period, they are going to be better in 2008-2012 period as the allocations would be tighter," said Mr Sudipta Das, Partner, Ernst & Young.

However, European Governments could emerge as buyers and so could Japan and Canada. "But Japanese market is not currently regulated and Canada is shrouded by uncertainty," Mr Taylor said. A host of Indian companies, which have accumulated carbon credits or are expecting them, were looking forward to additional revenues by trading credits.

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