Pacific Hydro - Carbon Trading

The value of clean air

The carbon credit market is booming. With signatories to the Kyoto Protocol needing to meet emission reduction targets from 2008, the demand for clean energy is unprecedented.

Analysts predict the carbon credit market will be worth between $US10 billion and $US2.3 trillion by 2012* and Pacific Hydro is ready with the knowledge and experience to become a significant player both in the production, project accreditation and trading of carbon credits.

In June 2005, we negotiated the world's first bank intermediated carbon credit transaction, securing a deal with the Netherlands-based international bank ABN Amro for the purchase of 100 per cent of the CERs created from our Wainikasou and Vaturu projects in Fiji. This experience has positioned us as one of the only companies with a first-hand understanding of the CDM registration process and also how to structure and complete deals for the sale of carbon credits.

Our next opportunity is in Chile, where our La Higuera and La Confluencia hydro projects have the combined potential to generate 870,000 carbon credits a year. When La Higuera recently received registration under the CDM, it became the largest hydro project, and the first in Chile, to be registered.

*www.globalenergy.com

CERs In Brief

Pacific Hydro generates carbon credits through projects recognised under the Kyoto Protocol’s Clean Development Mechanism (CDM). CDM recognises projects that reduce carbon emissions in developing countries and rewards them with tradable credits called Certified Emission Reductions (CER). As these developing countries do not have any Kyoto targets of their own, these CER’s can be sold on to countries that do, allowing those countries to meet their targets without actually having to make any cuts. Under the global Kyoto agreement, a CER is proof enough that the world’s net greenhouse gas has been reduced. One CER equates to an emission reduction of one tonne of CO2.