London, Oct. 2 (Reuters Point Carbon) – Developers of low-carbon cookstove projects sold four times more carbon offsets in 2012 compared to the year prior, with the credits continuing to yield a hefty premium over the bulk of U.N.-backed offsets, a report showed.
Developers of projects that distribute energy efficient cookstoves sold 16.9 million carbon credits last year, said the Sept. 25 report commissioned by the Global Alliance for Clean Cookstoves.
“Anecdotal evidence suggests that 2012’s quadrupling in cookstove offsets contracted stems from project developers’ growing awareness of how the carbon market can support such projects,” the report added.
The popularity of energy-efficient cookstove projects has soared in recent years, as developers claim they provide additional benefits for households in developing countries, for example slashing cooking fuel bills while cutting air pollution and reducing health risks.
Buyers of the credits paid an average of $9.90 (7.28 euros) per credit last year, down 25 percent from 2011 but still more than three times than the average price of most U.N.-backed carbon credits traded in 2012, the report said, adding that the decrease was due to swelling supply.
Around half of the credits were purchased by voluntary buyers looking to meet corporate social responsibility goals, while the rest were bought by compliance buyers in the EU’s Emissions Trading Scheme – the world’s largest carbon market – from projects registered under the U.N.’s Clean Development Mechanism (CDM).
The CDM allows investors in emission reduction projects in poor nations to earn credits that governments and companies can use to offset emissions, making it cheaper to meet carbon curbs set by the U.N. and EU.
The price of CDM credits has plummeted to around 60 cents from over 20 euros five years ago, after countries failed to agree a global climate pact that would have triggered demand.
Despite weak CDM prices, developers of over half of the new cookstove schemes used U.N. guidelines last year, the report said, as changes to EU rules made investing the world’s poorest countries more attractive to investors.
Around 60 cookstove projects have been registered under the CDM, with a further 42 in early stage development in eligible countries, according to Thomson Reuters Point Carbon data.
The registered projects are expected to generate more than 15 million carbon credits by the end of the decade.
“Some project developers fear that prices will continue to fall due to the uncertainty surrounding the future of compliance markets, but also to ever-increasing volumes of offsets becoming available from cookstove projects,” the Alliance report said.
The Global Alliance for Clean Cookstoves is a U.N initiative with around 800 public, private and non-profit partners pushing for the distribution of 100 million clean cookstoves by 2020.
The report used data from around 250 Alliance partners who responded to the survey, 33 of which were carbon project developers.
Our Standards: The Thomson Reuters Trust Principles.
