environmental industries sector unit cdm opportunities in south korea greg dunne, director, icecap...
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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 KoreaTRANSCRIPT
Environmental Industries Sector Unit
CDM Opportunities in South KoreaGreg Dunne, Director, ICECAP Ltd.
Seoul, 25th September 2006
EISU Seminar Mission South Korea
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
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
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
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
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
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
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
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