South Korea’s Solvay Fluor has cancelled 367,000 CERs from the UN’s CDM registry to have them converted into offsets eligible for the Korean ETS where they trade for as much as 18 times more.

The cancelled CERs were from Solvay’s SF6 recovery and reclamation project in Ulsan, a UNFCCC website showed.

Last month, Solvay cancelled 100,000 CERs from the same project, also with the intention of converting them to Korean Offset Credits (KOCs), which companies can use for ETS compliance when converted further into Korean Carbon Units (KCUs).

KOCs currently trade at around $12 each in the OTC market, offering Solvay far better prospects than the CDM market, where CERs fetch less than 70 cents.

The fresh KOC supply – likely to be made available to the Korean market after the government’s next offset issuance meeting – will offer some relief to emitters who claim they have been under-allocated by around 10%.

KOCs tend to be snapped up over the counter as soon as they enter the market, leaving liquidity on the Korea Exchange – which only offers KAU and KCU trading – very low, despite a spate of trades earlier this month.

By Stian Reklev – stian@carbon-pulse.com

Not yet signed up to CP Daily? Subscribe to our free newsletter here