London - Three major international commodity traders bought a total 510,000 African carbon offsets from clean energy project developer ecosur afrique in the first half of 2014, showing some demand still exists for credits from the battered UN market.
The credits - known as Certified Emissions Reductions (CERs) are to be delivered to the buyers Vitol, Bunge and Shell Trading before the end of 2015, ecosur chief executive Fabrice Le Sache told Reuters on Wednesday.
The CERs are sourced from four projects in Burundi and one in Uganda.
Under the United Nations' Clean Development Mechanism, companies and individuals can buy CERs from greenhouse gas reduction initiatives in developing countries, and use those credits to offset their own carbon footprints.
But a lack of ambition from governments and companies to cut their carbon emissions, mixed with swelling supplies of CERs, has caused demand for the credits to wither and their price to crash by more than 99 percent in the past six years.
Le Sache said some CER demand remains, especially for those approved by Swiss-based certifier Gold Standard, a process that is seen as improving their environmental credibility.
“There is still demand, we're still doing deals,” he said, adding that he expects to ink more sales in the near future.
Ecosur afrique said it has 20 CDM projects registered in sub-Saharan Africa, making it the region's largest developer.
Le Sache said ecosur, which is headquartered in Mauritius and Ivory Coast will in November open a European office in Brussels, where the firm's new trading division will be based.
With a staff of three in the Belgian capital, the firm will trade CERs, EU Allowances and voluntary carbon credits, as well as other agricultural commodities, on behalf of clients and as part of a proprietary portfolio, he added.
The CERs sold by ecosur in the past six months are generated by carbon dioxide reductions linked to energy efficiency and clean cookstove projects across Burundi and wastewater treatment and renewable energy facilities at a sugar factory in Uganda.
Le Sache would not disclose further details of the deals but said the contracts were all negotiated with a floating sale price based on the market rate for CERs.
According to London-based exchange ICE, CERs for delivery in December were worth around 16 cents each on Wednesday.
The UN is looking for other ways to bolster demand for CERs while negotiations drag on between rich and poor nations over who should shoulder the brunt of efforts to curb emissions output under a new global climate agreement expected in 2015.
On Wednesday, the UN's climate secretariat announced it would encourage its staff and their families to buy the credits to offset their personal day-to-day emissions.
Staff can purchase CERs from the UN's Adaptation Fund, which is supported in part by a two percent levy on all issued credits but is facing a dearth of cash due to low CER prices and few projects requesting credits.
The UN said it will expand the campaign to include local governments, companies and individuals seeking to offset their carbon footprints while they help fund cleaner energy in developing countries. - Reuters