Two carbon project developers – First Climate and Camco – unveiled new ventures in China on Thursday.
First Climate, headquartered in Frankfurt, Germany, said it was set to cooperate with Australian
financial group Macquarie in order to expand its existing clean development mechanism (CDM) portfolios in China. The two groups would jointly source, develop and manage new projects, as well as share revenues from the Certified Emission Reductions (CERs) issued.
First Climate has been active in China for three years, employing 10 staff on the ground. Thomas Stetter, member of the executive board at First Climate, told ICIS Heren the joint venture would consider all types of projects, but that the focus would probably remain on renewable and energy efficiency projects. This also reflects Macquarie’s current CDM portfolio, which has been running for two and a half years, a spokeswoman for the bank said.
The credits would be both sold on the secondary CER market and as financial products. Macquarie might also provide financial incentives such as prepayment for specific projects Stetter said.
Another project developer, UK-listed Camco, has now fully taken over ESD Sinosphere, a Chinese company that provides technical due diligence and emissions assessments for potential CDM projects in the country.
Camco announced on Thursday that it had added a 49% stake to the 51% equity in ESD Sinosphere it bought in 2007. The acquisition values ESD Sinosphere at €125,000, around 1.5% of the €8.2m loss that Camco posted in the first half of 2008 as a result of bottlenecks in the CDM approval process.
Recently, the price differential between primary and secondary – or guaranteed – CERs has narrowed.But as secondary CER prices fall because of the generally gloomy economic outlook, thisdifference is likely to start to widen again as primary CER prices follow, Stetter told ICIS Heren, adding: “We already see this happening, and the change might become even more dramatic. It depends a lot on the expectations of future prices. If you expect future CER prices to rise, you might think you are not getting a high enough price [for your primary CERs]. But if you expect prices to fall, you might be satisfied with a lower price.”
Source: European Daily Carbon Markets
