Cost of HCFC-22 less than value of carbon credits from not making it

The cost of making HCFC-22, which is used in refrigerators and air conditioners, is, oddly, less than the value of carbon credits you can be given by destroying HFC-23, a by-product from making it, writes Gangadhar S Patil in the Indian news service “Daily News and Analysis”.

 

This is because HFC-23, a by product of making HCFC-22, is 11,700 more powerful a greenhouse gas than carbon dioxide.

Mr Patil calculates that over 50 per cent of all carbon credits issued before July 2012 were for destroying HFC-23.

So companies are incentivised to make HCFC-22 just so they can have HFC-23 and destroy it.

There has also recently been a sharp fall in the price of HCFC-22, he writes.

One company Gujarat Fluoro Chemicals, increased production of HCFC-22 by 45 per cent after getting clean development mechanism (CDM) approval in 2004, Mr Patil writes, after researching the company’s annual report.

Meanwhile, between 2005 and 2012 it earned 1,000 crore (x 10m) Rupees, or GBP 110m, from selling carbon credits.

At the same time, the company’s inventory of HCFC-22 increased from 349 units in 2005 to 3599 units in 2010, suggesting that it is manufacturing large amounts of HCFC-22 but keeping it in storage. It is not known what its long term plans for this are.

In 2011 the CDM executive board considered stopping issuing carbon credits for destruction of HFC-23 gas.

Michael Ware of Stanford University is quoted as saying that most credits generated in the CDM come from projects which are suspected of over-crediting and are creations of bogus accounting.

Amar Mody, a carbon market specialist in Mumbai, is quoted as saying that he estimates that almost 40 per cent of total greenhouse gas reductions have a false baseline figure.

 

 

China researching national carbon trading market – Carbon Daily

China is doing research into a national carbon trading market, according to a “top climate change official” quoted speaking to Chinese state controlled newspaper China Daily.

Xie Zhenhua, vice-chairman of the National Development and Reform Commission (NDRC), is quoted as saying that the United States, Australia, Japan and the European Union are discussing the possibility of building a sub-regional or regional carbon market with China.

The NDRC selected seven pilot regions in November for the trial implementation of carbon trading. The pilot regions will design regional regulations, specify the scope of trading and build a trading platform.

“Our priority is getting our work done first, accumulating experience and then taking part in making the rules,” he is quoted as saying.

The trial will continue until 2015, followed by a nationwide carbon market between 2015 and 2020.

China is working on designing the guidelines for reporting formats and accounting standards of carbon emissions, and building an online energy consumption monitoring system for major industries, China Daily reported.

There might also be futures trading.

Sun Cuihua, vice-director of the NDRC’s Department of Climate Change, is quoted as saying that the country is designing accounting methods for carbon emissions for six major industries to lay the foundations for a national carbon-trading program. It will cover power, steel, cement, plate glass, nonferrous metal and aviation sectors.

Regional carbon trading schemes in Beijing and Shanghai have already become operational, with Guangdong province launching its pilot carbon-trading scheme in early October.

 

London carbon credit scam – £7,900 victim – Daily Mirror

UK newspaper the Daily Mirror has reported that an investor has lost £7,900 after being persuaded to invest the money in carbon credits, by the firm which subsequently went bust.

The investments were billed by the “London Carbon Credit Company” as something which could enable people to “Profit in an ethically sound fashion.”

One investor invested £5,000 and £2,900 in separate tranches of carbon credits.

“I have tried in vain to get my money back since the end of April and now it looks like they [the company] may have disappeared,” the investor is quoted as saying.

The company used logos from carbon credit certification schemes, including the Gold Standard Foundation, Verified Carbon Standard and Ethical Junction, although these companies were contacted by the Daily Mirror journalist and said that the London Carbon Credit Company was not authorised to use their logos.

An independent financial advisor was contacted by the Daily Mirror and said “I cannot find any information as to the current tradeable value of your reader’s carbon credits and am concerned that they may be impossible to trade and have little or no value.”

The FSA warned this month that it is receiving “many reports from people who have been approached by firms promoting carbon credits in the UK.”