Carbon trader bags 200,000 CCERs, resells most to Tianjin buyers

Published 12:11 on April 23, 2015  /  Last updated at 13:14 on April 23, 2015  /  China, China's Offset Market, China's Pilot Markets  /  No Comments

Trading firm Timing Carbon on Thursday bought 200,000 pre-CDM CCERs on the Tianjin Climate Exchange and has already contracted to sell most of them to local compliance buyers, who have yet to learn whether any types of offsets will be restricted in the Tianjin ETS.

Trading firm Timing Carbon on Thursday bought 200,000 pre-CDM CCERs on the Tianjin Climate Exchange and has already contracted to sell most of them to local compliance buyers, who have yet to learn whether any types of offsets will be restricted in the Tianjin ETS.

The 200,000 CCERs, the biggest offset deal so far on the Tianjin exchange, were sourced from a pre-CDM hydro power project in Gansu province, owned by a local power company.

“Most of the CCERs have already been sold to compliance buyers,” Kathy Kong, Timing Carbon’s CEO, told Carbon Pulse, declining to disclose the price paid in Thursday’s deal.

Both hydro and pre-CDM offsets are ineligible in several of China’s pilot carbon markets, such as Beijing, Chongqing, Guangdong and Shanghai, and normally trade in the 5-8 yuan ($0.80-1.30) range.

In comparison, offsets from new projects normally fetch 18-25 yuan each.

Allowances in the Tianjin market closed Thursday at 24.40 yuan, with only 40 units changing hands.

Some observers say the vastly differing rules for offset eligibility in the pilot schemes mean some of the markets risk becoming dumping grounds for cheap credits that are banned elsewhere.

Tianjin and Shenzhen are the only two Chinese pilot markets yet to release rules for offset restrictions, although the latter is expected to do so shortly.

Last month, a Tianjin steelmaker bought 80,000 pre-CDM CCERs in a deal observers said suggested the local government had no plans to ban that type of offsets.

By Stian Reklev – stian@carbon-pulse.com