* Indian CDM investors see growing market for offsets
* Poll finds most support for renewable energy projects
* Post-2012 forward contracts for offsets gaining favour
By David Fogarty
SINGAPORE, June 28 Nearly 70 percent of
clean-energy project developers in India believe there will be
a post-2012 successor to the U.N.'s Kyoto Protocol climate pact
with binding emissions targets, according to a poll.
And nearly 60 percent expect markets in the United States,
Japan and Australia will accept tradeable carbon offsets from
their projects, the poll by Emergent Ventures India (EVI) said.
EVI, a leading Indian clean energy project developer and
advisory firm, polled 63 project developers in May on post-2012
market for offsets under the U.N.'s Clean Development Mechanism
and prices for their offsets.
CDM, part of the Kyoto Protocol, rewards investors in
projects that cut greenhouse gas emissions in developing
Investors earn offsets called certified emissions
reductions (CERs) used by governments or companies in rich
nations to meet emissions reduction targets. India is the
world's second largest source of CERs after China, and Europe
is the top buyer.
The poll found that nearly 90 percent of respondents were
very confident or reasonably confident that their CERs would
have a market value after 2012, despite growing concerns over
the shape or even existance of the CDM after 2012.
The Kyoto Protocol's first phase ends in 2012 and talks on
a successor pact have bogged down.
The European Union has also said it might limit CERs
sourced from some types of projects and from larger developing
nations from 2013, the start of the bloc's tougher third phase
of its emissions trading scheme.
Indian project developers remain upbeat about the market,
the poll found, despite the gloom that followed last December's
climate talks in Copenhagen.
"The post-Copenhagen negative vibes about the carbon market
has been somewhat offset by the recent appreciation of CER
prices," EVI says in the poll.
CER futures traded on the European Climate Exchange
CEREZ0 hit a high of just over 24 euros in July 2008, plunged
to 7.35 euros in early 2009 but have stabilised at around 12 to
13 euros over the past year.
Nearly 90 percent of respondents were certain that credits
from renewable energy projects would be accepted into the EU's
emissions trading scheme from 2013.
Just over 40 percent thought credits from projects that
destroy industrial gases, such as HFC-23, might also be
allowed, even though their acceptance in the EU's emissions
market seems increasing uncertain.
India is primarily a market for CER spot contract trades,
but forward contracts were becoming increasingly favoured for
post-2012 CERs, EVI said.
"This is being done to hedge the risk that the post-Kyoto
Protocol carbon market faces. This makes sense given the carbon
market is young, volatile and 2013 onwards seems all the more
uncertain," said analyst Zubin Sarkar, who conducted the
Expectations of post-2012 CER prices, though, were modest.
"Considering time value of money and discounting factors,
the price expectations for post-2012 CERs by the respondents
were moderate with 83 percent expecting a nominal price below
20 euros," the poll found.
It also found that 37 percent of project developers thought
now was the best time to sell CERs, while 35 percent felt
towards the end of 2012 would be the right time.
(Editing by Ed Lane)