Dirk Forrister - IEA
Greenhouse Gas Markets An Update on EU ETS & CDM/JI Markets IEA / IETA / EPRI 6th Annual Workshop on GHG Emissions Trading IEA Headquarters, Paris Dirk Forrister Natsource 26 September 2006
Some new thinking from Natsource. More growth. Less pollution.
Where is it all going? NE States? California? Canada
Japan
Norway
Norway UK
EUETS CO2 only, Power mainly
Full Global Trading:
EU ETS: CO2 only, Power mainly
Large Sources of CO2, CH4, N2O HFC, PFC, SF6
JI: CH4, N2O
All Major Emitting Countries
CDM: Any gas, any sector 2005-07
2008-12
Beyond 2012
HIgh
Funds & Investment Pools in the Carbon Market
Delivery Risk
Prototypes (PCF)
Speculative Funds
Low
Futures Markets
GG CAP, other Compliance Funds
Spot Markets
Short
Govt Procurement Initiatives
Timing of Deliveries
Long
Growth in Interest in CDM / JI The GHG Credit Market 2005 • • •
KP Entry into Force + ETS revived major interest in CDM/ JI € 9 billion focused on GHG cuts in ETS € 3 billion in new funds formed
•
Plus growth in equity financing for suppliers
•
So complex, so why the attraction to CDM?
– – – –
IPOs (est €500 m) Private equity capital infusions
–
Prices lower than EUAs, reflecting delivery risks CDM EB & administrative reforms are not fully implemented – so regulatory risks persist
–
• Source: CDC “Mission Climat” Research Report No. 7, Nov 2005
50% in Government purchase funds 33% in Private sector funds
Impact: Early start of ETS is broadening participation in KP, & a stronger environmental industry is emerging
CDM/JI Market Growth
Total Traded Volume of Project-Based Emissions Reductions Source: World Bank State and Trends of the Carbon Market Report 2006
Technologies in CDM/JI
Percentage of Traded Volume by Technology (2005 - Q1 06) Source: World Bank State and Trends of the Carbon Market Report 2006
Buyers & Sellers in the CDM/JI Market
Sellers in 2005
Buyers in 2005 Source: World Bank State and Trends of the Carbon Market Report 2006
Some new thinking from Natsource. More growth. Less pollution. Tel + 44 (0) 20 8439 9515 [email protected]
www.natsource.com
Some new thinking from Natsource. More growth. Less pollution.
Where is it all going? NE States? California? Canada
Japan
Norway
Norway UK
EUETS CO2 only, Power mainly
Full Global Trading:
EU ETS: CO2 only, Power mainly
Large Sources of CO2, CH4, N2O HFC, PFC, SF6
JI: CH4, N2O
All Major Emitting Countries
CDM: Any gas, any sector 2005-07
2008-12
Beyond 2012
HIgh
Funds & Investment Pools in the Carbon Market
Delivery Risk
Prototypes (PCF)
Speculative Funds
Low
Futures Markets
GG CAP, other Compliance Funds
Spot Markets
Short
Govt Procurement Initiatives
Timing of Deliveries
Long
Growth in Interest in CDM / JI The GHG Credit Market 2005 • • •
KP Entry into Force + ETS revived major interest in CDM/ JI € 9 billion focused on GHG cuts in ETS € 3 billion in new funds formed
•
Plus growth in equity financing for suppliers
•
So complex, so why the attraction to CDM?
– – – –
IPOs (est €500 m) Private equity capital infusions
–
Prices lower than EUAs, reflecting delivery risks CDM EB & administrative reforms are not fully implemented – so regulatory risks persist
–
• Source: CDC “Mission Climat” Research Report No. 7, Nov 2005
50% in Government purchase funds 33% in Private sector funds
Impact: Early start of ETS is broadening participation in KP, & a stronger environmental industry is emerging
CDM/JI Market Growth
Total Traded Volume of Project-Based Emissions Reductions Source: World Bank State and Trends of the Carbon Market Report 2006
Technologies in CDM/JI
Percentage of Traded Volume by Technology (2005 - Q1 06) Source: World Bank State and Trends of the Carbon Market Report 2006
Buyers & Sellers in the CDM/JI Market
Sellers in 2005
Buyers in 2005 Source: World Bank State and Trends of the Carbon Market Report 2006
Some new thinking from Natsource. More growth. Less pollution. Tel + 44 (0) 20 8439 9515 [email protected]
www.natsource.com
