First Overseas Greenhouse Credits Trade Today on Australian Exchange
PRESS RELEASE - 2 May 2008
VER+ Offsets from Russian Project Traded within 24 hours of listing on the ACX.
Australia's first greenhouse gas emissions trading exchange, the Australian Climate Exchange (ACX), added to its reputation as a market innovator today as the first greenhouse gas offsets from an overseas project sold within hours of being listed on the exchange. To date all units offered for sale on the exchange had been verified emission commodities from domestic abatement projects.
The offsets come from the internationally respected VER+ label, attesting to the fact that they have been verified by German compliance and audit giant TUV SUD, one of the best known and respected UNFCCC Designated Operating Entities and operator of the Blue Registry.
Tim Hanlin, managing director of ACX, said the listing of the VER+ offsets on the exchange is another significant milestone for carbon trading in Australia and he was proud of the team that has worked tirelessly to ensure that once again ACX achieved this market "first".
"The product origination team has been working through the issues of listing and more importantly delivering verified abatement from non-domestic projects since the newly elected Prime Minister announced Australia's intention to ratify Kyoto at the Bali COP/MOP in December."
“The fact that these VER+ credits were snapped up within 24 hours of listing is not only a vindication of our due diligence but also a signal that the Australian buyer has become more sophisticated,” Mr Hanlin said.
The VER+ offsets are sourced from a Russian gas pipeline upgrade project where the ageing infrastructure and market structure meant that without the value of the credits neither the gas supplier, pipeline owner or retailer had any financial incentive to prevent the highly destructive methane (23 times the global warming potential of CO2) escaping through the joints valves and meters in the gas distribution network.
Rob Cawthorne, managing director of the Carbon Reduction Institute (CRI), who bought the VER+ offsets on behalf of one of their clients, said the project was not only environentally and financially additional it also had the benefit of resource stewardship.
“Access to overseas credits gives CRI the opportunity to offer our clients a wider portfolio of verified emission reduction with additional sustainability benefits. We also value the transparency of ACX’s exchange” Mr Cawthorne said.
ACX executive and head of the origination team that brought the product to market, Manus Higgins, stressed that while the project quality and the credibility behind TUV SUD’s VER+ label was important the real value was in the provenance assurance that the registries provide.
“A great deal of the work was done by the respective registrars of the Blue Registry and ACX Registry Services in working out the procedures for transferring good title between the buyer and the seller. Now we have this process sorted out, we see a huge market opening up in VER+” Mr Higgins said.
100 tonnes of the VER+ product traded today on the ACX at AU$8.00 per tonne which represents a discount of 85cents a tonne on the local product. “ I expect to see the overseas and local products approach parity in coming months as the market becomes more sophisticated” Mr Hanlin said
ACX, which is a Melbourne based exchange, is a pioneering joint venture between the Australia Pacific Exchange (APX) and Australian Climate Exchange Ltd and was launched by APX chairman Ray Schoer on 23 July 2007.