Environmental exchanges sign landmark deal

THE CREATION of the world’s biggest carbon offset exchange has come a step closer after the NYSE’s BlueNext and the China-Beijing Environmental Exchange (CBEEX) signed an agreement to set up an information platform on “clean development” projects.

Due in part to its joint ownership by NYSE Euronext and state-owned French bank Caisse des Dépôts, BlueNext now claims to be the world’s largest spot certified emissions reduction (CER) trading exchange, with more than 24 million tonnes traded since it was launched in August 2008.

CBEEX represents a gateway to China, which last year accounted for more than half of the world’s primary market for clean development mechanism (CDM) projects under the Kyoto Protocol on climate change.

Through the CDM, developed countries or companies seeking to reduce their carbon emissions gain credits from investing in clean development projects in developing countries, and these CERs can be used for compliance in meeting Kyoto targets.

The State’s National Treasury Management Agency purchased 5.25 million tonnes of CERs last year at a cost of €73.3 million.

However, it was told by Minister for the Environment John Gormley in April that it may not need to buy more due to the impact of the recession.

Under the deal signed today in Beijing, CBEEX will give BlueNext access to its database of CDM projects in China, making it accessible from the BlueNext website (www.bluenext.eu). In return, BlueNext will lend its expertise on the CER market to CBEEX.

“This is another step in our wish to expand our market into the great potential that is China and the rest of Asia,” said BlueNext chief executive Serge Harry. It would also advance the company’s ambition to be “the reference point for a single international price for carbon”.

BlueNext now bills itself as “the Earth’s exchange”. CBEEX was established in August 2008 and is “the first state-level Chinese environmental rights and interests trading platform”, according to a BlueNext spokesman.

The CDM’s share of the overall carbon market is expected to grow from 19 per cent to 57 per cent over the next three years.