Global Offset Experts: Barclays Capital analysts cut carbon price forecast for first half of 2011.

Jan. 11, 2011 - PRLog -- As a result of a substantial increase in the issuance of UN-backed carbon offsets under the Clean Development Mechanism (CDM), Barclays Capital has informed Global Offset Experts that they have cut their price forecast for the first six months of 2011.

Under the CDM, companies are able to invest in carbon-cutting projects in developing nations, and in return receive offsets called Certified Emissions Reductions (CERs) which the firms are able to use against their own emissions.

Recently CER issuance broke the 500 million mark after 1.3 million were awarded to a scheme which destroys the intense greenhouse gas HFC-23. The latest 1.3 million issuance awarded to the India-based HFC-23 project swelled the total to 502 million.

Global Offset Experts has learned that this issuance comes shortly after a bumper issuance in the first week of this year, when around 3.5 million CERs were issued, setting January on course for a record high for issuances.

As a result of the increased volume, the benchmark CER contract dropped to €11 per tonne, its lowest level since February 2010.

Barclays Capital went on to inform Global Offset Experts that they expect CER issuances to remain high in the near future with 46.8 million metric tons of CER’s currently in the system awaiting issuance.

"With all of that (and others) expected to be issued in Q1, CER liquidity in the coming months should remain high and we forecast that 200 million (metric) tons of CERs will be issued over 2011," Barclays Capital analysts told Global Offset Experts.

Industry specialists known to Global Offset Experts say that this high issuance is likely to be met by greater demand by as soon as the second quarter, making it likely that the price of CER’s is to remain in the €11 to €12 range over the coming weeks.

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