20 September 2007
NGACs Versus the VERs
ACX chief calls upon NSW carbon offset providers to shift to AGO Voluntary Emission Reduction units.
Australian Climate Exchange (ACX) managing director, Tim Hanlin today called upon troubled NSW carbon credit producer Easy Being Green to switch their focus from the oversupplied NGAC market to produce Greenhouse Friendly VERs – the rising star of the Australian emissions trading scene.
The weakening NSW Government (Greenhouse Gas) Abatement Certificates, referred to as NGACs, have been overshadowed by VERs, which are AGO-accredited Voluntary Emission Reduction units.
“We have seen a steady rise in the price of VERs trading on the ACX since we launched in July while the price of NGACs (mainly traded off market) has apparently halved over the same period,” Mr Hanlin said.
“The irony is that the NGAC is a compliance certificate while the VER, which is accredited by the Australian Greenhouse Office (AGO), is a totally voluntary product.
“The VER has traded on relatively low volumes over the last two months, however there has been a steady increase in its price from the first trade of $8.50 to the latest trades at $8.75 per metric tonne of CO2,” Mr Hanlin said.
According to several recent media reports covering the apparent demise of one of the largest producers of NGACs, Easy Being Green, the market for NGACs has fallen from $12 to $6 for the same quantity of carbon abated over the same period.
When asked to explain the contrasting performance of the two instruments Mr Hanlin made a couple of observations: “The fact that the VER is accredited by a federal government agency under one of the most rigorous measurement and verification protocols and the certainty that we will have a national trading scheme sometime in the next four years has made it the instrument of choice for most corporate buyers.
“There is currently a limited supply for this product and we are already seeing signs that demand will outpace supply in the foreseeable future.
“We are actively encouraging potential suppliers to bring abatement projects to market to meet this demand.
“Easy Being Green’s focus seems to be on trying to get the NSW Government to increase the compliance hurdles for the NGAC market at a time when the NSW Government is preparing to privatise the State-owned power companies,” Hanlin said.
For further information:
Tim Hanlin
Managing Director
Australian Climate Exchange
Ph: 08 9347 8002
Mobile 0419 910 096
Terry Maher
Monsoon Communications
03 9620 3333
0416 293 731