environmental industries sector unit cdm opportunities in south korea greg dunne, director, icecap...

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Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission South Korea

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Environmental Industries Sector Unit London – Centre for Emissions Trading Traders: Utilities, Financial Institutions & Hedge Funds Brokers: All Major Emissions Brokers have Desks in London Exchanges: European Climate Exchange (ECX) based in London Funds: Most Carbon Funds Managed in London IPOs: Several Listings of Carbon Market Service Providers Project Finance: Major Provider to the Developing World Service Providers: Global Environmental Consultants & Audit Firms EISU Seminar Mission South Korea

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Page 1: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

CDM Opportunities in South KoreaGreg Dunne, Director, ICECAP Ltd.

Seoul, 25th September 2006

EISU Seminar Mission South Korea

Page 2: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

UK – A Climate Change Leader

Contributor to the Scientific Debate

Ratified the Kyoto Protocol – 12.5% Target

Policy is to Significantly Outperform Kyoto Targets – 15-18% (60% by 2050)

UK Emissions Trading Scheme preceded European Emissions Trading Scheme

Strict National Allocation Plans

Aggressive Renewable Energy Targets

International Dialogue at EU, UNFCCC and G8

Promoter and Supporter of Clean Energy Technologies

EISU Seminar Mission South Korea

Page 3: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

London – Centre for Emissions Trading

Traders: Utilities, Financial Institutions & Hedge Funds

Brokers: All Major Emissions Brokers have Desks in London

Exchanges: European Climate Exchange (ECX) based in London

Funds: Most Carbon Funds Managed in London

IPOs: Several Listings of Carbon Market Service Providers

Project Finance: Major Provider to the Developing World

Service Providers: Global Environmental Consultants & Audit Firms

EISU Seminar Mission South Korea

Page 4: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

The Clean Development Mechanism (CDM)

GHG Projects are ‘normal’ projects, which lead to a reduction of greenhouse gas emissions and are eligible for tradable emission reduction credits

Implement a GHG emission reduction project in one country, and claim the emission reductions in another

Additional value (‘carbon finance’) to projects which reduce GHG gases, because of the opportunity to sell this reduction

Emissions reductions are achieved at lowest cost

Legal Framework: UNFCCC, Kyoto Protocol & European Linking Directive

Project Types: Renewable Energy; Fuel Switching; Reduced Industrial Process Emissions; Management of Biodegradable Waste; Capture of Waste Gases for Destruction, Conversion or Reuse

EISU Seminar Mission South Korea

Page 5: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

CDM Benefits Annex A Countries Meet Kyoto Targets at Least Cost

Developing Countries Benefit from Technological Transfer and Innovation, Higher Foreign Direct Investment, Capacity Building and Sustainable Development

Investment Capital Generated from a Wider Pool of Investors

Transforms Unviable Projects Creating New Opportunities

Early Access to a Wider Range of Technology Solutions

Reputational Benefits

EISU Seminar Mission South Korea

Page 6: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

CDM Market Developments

Market is complex, illiquid and risky … but growing rapidly (at least 1 billion tonnes in the pipeline*)

Buyers are Annex A governments, multilateral development banks, carbon funds and private sector entities mostly from Europe but also Japan

Sellers are mostly in China, India, Brazil & South Korea

Most trading in CERs is on a forward basis – spot market unlikely until the international registry in 2007 Trading is OTC and mostly on a principal to principal basis so price discovery is limited

CERs trade on a stand alone basis or at a discount to EUAs – prices are moderating as supply exceeds demand

* Source: UNFCCC

EISU Seminar Mission South Korea

Page 7: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

ICECAP

ICECAP Founded in 2003 and Incorporated in the UK

ICECAP Trading: one of the largest private sector buyers of CERs in 2005 ICECAP Launched the ICECAP Carbon Portfolio in January 2006 with Investment Grade Rated Participants and Substantial Demand for CERs

ICECAP Team Specialises in Commercialising Carbon Assets

ICECAP Committed to the Asian Carbon Markets – Office in China and Transaction History in China, India and South Korea

EISU Seminar Mission South Korea

Page 8: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

ICECAP – Benefits for SellersPrincipal-to-Principal Relationship

Aggregation Ability allows Rapid Access to a Huge Market

Innovative Pricing Mechanisms with Focus on Sharing of Risk & Rewards

Appreciation of Sellers’ Delivery Risk Concerns

No Restrictive Investment Criteria

Credit Enhancement

Transaction Risk Management

Flexibility, Support and an Experienced Professional Team

Track Record and Good Relationships in Asia

EISU Seminar Mission South Korea

Page 9: Environmental Industries Sector Unit CDM Opportunities in South Korea Greg Dunne, Director, ICECAP Ltd. Seoul, 25 th September 2006 EISU Seminar Mission

Environmental Industries Sector Unit

ICECAP Ltd

Asia

Li Xing +86 139 250 19819 [email protected]

Suite 2201, Building no. 14Jianwai SOHO, Beijing 100022China

T: +86 105 869 9062

Europe

Greg Dunne +44 (0)7768 791028 [email protected]

5-8 The Sanctuary, London SW1P 3JS, United Kingdom

T: +44 (0)20 7341 0910

www.icecapltd.com

EISU Seminar Mission South Korea