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The most significant current buyers of<br />
Kyoto-compliant carbon credits are<br />
institutional buyers, such as the World<br />
Bank (the size of the fund is estimated at<br />
US$409 million) and the Dutch<br />
government (US$280 million).<br />
Emerging buyers include Austria<br />
(US$257 million) and Japan (US$141<br />
million).<br />
Price of a carbon credit<br />
The current carbon market is far from<br />
liquid, and there is no transparent pricing<br />
mechanism for carbon credits. Thus,<br />
estimates of the value range from US$2-<br />
60/tonne (carbon equivalent).<br />
There are generally three types of carbon<br />
credit:<br />
• A non-Kyoto-certified credit – this<br />
involves the buying and selling of<br />
credits that are not eligible for use in<br />
meeting national Protocol targets.<br />
• A Kyoto-certified credit that cannot<br />
be banked for use against future<br />
targets – these contribute to achieving<br />
the formal targets agreed in the<br />
Protocol.<br />
• A fully transferable and bankable<br />
Kyoto-certified credit - this commands<br />
the highest price. Point Carbon, a<br />
website monitoring emission trades,<br />
states that the spot price for a tonnecredit<br />
of carbon, as at April 13,<br />
2006, is €29.15 (compared to the<br />
€40 penalty per tonne for exceeding<br />
of limits).<br />
Meeting the targets<br />
The Kyoto Protocol provides three<br />
mechanisms that enable developed<br />
counties with quantified emission<br />
limitation and reduction<br />
commitments to acquire GHG<br />
reduction credits:<br />
• Joint implementation – a developed<br />
country with relatively higher costs<br />
GLOBAL OILS & FATS BUSINESS MAGAZINE •VOL.3 ISSUE 3, 2006 15
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