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U.N. ends Kyoto CO2 offset drought ahead of key meeting
LONDON (Reuters) - The United Nations' climate secretariat on Thursday issued 228,400 Kyoto Protocol carbon offsets to three Asian clean energy projects, ending a two-week issuance drought but failing to reassure concerned investors.
The offsets, called Certified Emissions Reductions, were given to two Chinese wind farms and an Indian biomass facility, and represented the largest daily issuance since June 16.
Under Kyoto's Clean Development Mechanism scheme, investors can fund cuts in greenhouse gas emissions in emerging economies, and in return receive CERs from the UN which can be used toward emissions targets or sold for profit.
The drop in CER issuances is one item which is likely to be discussed at a meeting of the CDM's executive board this week.
"It's taking longer to get CERs, so that delays project developer revenues and makes them harder to predict," said Niels von Zweigbergk, CEO of Tricorona, a Swedish-based developer which was recently bought by Britain's Barclays bank.
The UN last issued CERs on July 15, giving 136,200 to three projects in China, Colombia and Morocco.
Only 364,600 CERs, worth 2.7 million euros ($3.53 million) at market rates, have been distributed in July, a sharp drop from 3.4 million doled out in June and 10.5 million in May.
The flow of CERs has slowed this month due to the phase-in of new procedures to streamline offset issuances and limit waiting times at the CDM, a UN spokesman told Point Carbon News on July 13.
"We've not yet seen any improvements to the issuance process from these new procedures," von Zweigbergk added.
Point Carbon also reported that the CDM faced support staffing problems with some 75 roles left unfilled, including 24 vacancies dating back to 2009.
HFC DECISION ON FRIDAY
Although a UN website shows a number of large issuances may be coming soon, analysts predict the CER flow could remain starved if the CDM's executive board decides at its meeting to review the scheme's most lucrative projects, refrigerant gas plants that destroy a waste gas called HFC.
These projects account for half of all CERs issued to date.
The investigation was sparked when two green groups earlier this year made a submission to the board saying these projects were intentionally increasing their production solely to incinerate the extra HFC and collect offsets.
The CDM's 10-member board is expected to rule on the proposal on Friday, though some observers predict it could escalate the final decision to a UN climate summit in Mexico in November.
A blocking minority of three board members would be enough to prevent a formal review, sources close to the process said.
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