Weekly CDM and VER market summary - 27 July-2 August 2009

Volumes on CCX improved over the previous week with 182.8kt traded and the 2007 contract being the most popular. The 2009 contract closed the week $0.05 down on the previous Friday, at $0.45. CAR OTC CRTs forwards are hovering around the $7 mark with spot trading $2-3 higher.

The Dec09 secondary CER contract lost half a Euro to close the week at €12.30, with prices diving from mid-week. The EUA-CER spread narrowed slightly and the market is braced for a few slow weeks trading as many traders take annual leave. Primary CER buyers are accepting smaller sizes with most deals being built around an €8 level.

Recent vintage RE VCUs remain around $4-5 levels with older vintages and EE projects discounted. US VCUs attract a $1 scarcity premium. GS VERs are €8-9 for spot with forwards bid/offered at €6-9.

UK removes carbon allowance VAT

The British government has passed legislation to remove VAT from carbon emissions, effective from last Friday.

This follows allegations of VAT fraud in France and echoes the French and Dutch governments' positions. Spain and Germany, the two other main European countries where carbon is traded are expected to follow suit.

Traded volumes on BlueNext have been lower than average over the past several weeks following a period of strong activity.

Gold Standard raises prospect of link with US

The Gold Standard reckons its VERs could be fungible with the mooted US federal cap-and-trade scheme should the Waxman-Markey bill pass. It is believed by many market participants that new methodologies as well as existing Voluntary Carbon Market standards will need to be accepted in order to help meet the potential demand for non-US credits of up to 1 billion tonnes per year.

Switzerland to enter ETS talks

Switzerland could join the EU ETS at the start of phase 3 (2013). Negotiations to link the Swiss domestic ETS to the EU's are scheduled to begin in early 2010.

Canadian VCS boost

The VCSA has amended its rules to allow the issuance of VCUs from Canadian–originated projects without the need for the retirement of a matching number of AAUs.

This is expected to stimulate investment in Canadian VCS projects and hasten the availability of credits, transforming an otherwise stalled market, hamstrung by political indecision.

US and China ink climate pact

A MOU between the US and China agreeing more cooperation and dialogue on climate change and energy has been signed. The lack of any binding targets has earned derision from critics while others maintain it is an important first step in binding the world’s two largest emitters together, ahead of December’s talks in Copenhagen.

Tanzania verifies forestry projects

Two forestry projects from Tanzania claim to be the first to be verified to VCS AFOLU.

VER Statistics

APX GS Registry: 111 (+1) Projects Listed
APX VCS: 41 (+2) Projects with Issued VCUs
TZ1 VER Registry: 44 VCS (+1) Public View Projects
CCX CFI weekly volume: 182.8kt (+65.9kt)
CAR: 55 Projects Listed; 1.6Mt CRT issued

Source: APX; CCX; CAR; TZ1

CDM Statistics

Total Issued CERs: 316.8Mt Issuances: 1,193
Total CERs Requested: 1.6Mt Host countries: 57
Registered Projects: 1,750 (+10) Requests: 84

Source: UNFCCC

This report was provided by MF Global, a leading broker in exchange-traded futures and options

For more details on the company's carbon market activities contact Gareth Turner at gturner@mfglobal.com

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