(Reuters) – A UN panel will review carbon offset issuances requests by three Chinese greenhouse gas destroying projects, a UN spokeswoman said on Tuesday, a sign the most lucrative projects under the Kyoto Protocol may face more scrutiny.
The Shandong Dongyuen, Zhejiang Dongyang and China Fluoro projects, which destroy a potent gas called hydrofluorocarbon-23 and are approved under Kyoto’s $2.7 billion Clean Development Mechanism (CDM), had requested 4.5 million offsets, called Certified Emissions Reductions (CERs), from the UN’s climate change secretariat.
The CDM funds clean energy projects in emerging economies.
“There has been a request for review of the request for issuance,” a UN spokeswoman told Point Carbon News in an email.
Issuance to these three projects will now likely be delayed for at least two months as the board investigates the requests further, a move which could tighten CER supply further and drive up prices.
HFC projects approved under the CDM were accused by green groups earlier this year of intentionally upping their emissions in order to destroy them and collect more CERs.
The CDM’s executive board last month asked a working group to investigate the claims further.
There are around 20 HFC projects registered under the CDM and they account for around half of the 428.5 million CERs issued by the UN to date.
Technical problems following the implementation of new procedures at the UN’s climate arm had prevented the agency from publishing on its website which projects would have their CER issuance requests reviewed.
According to UN data, the three HFC projects’ CER buyers include Italian utility ENEL, Britain’s Natsource and Japan’s Mitsubishi, Sumitomo, Mitsui & Co., Tokyo Electric and Nippon Steel.
The three projects have received 45 million CERs to date.
A Chinese government fund told the CDM’s executive board in June it supported the country’s HFC project developers.
CERs futures for December delivery traded up 15 cents or 1.2 percent to 12.45 euros a tonne on Tuesday morning.
Article by Michael Szabo; Edited by Sue Thomas; Appearing Courtesy Reuters.