Risa Maeda

Marubeni Corp and Nikko Citigroup Ltd said on Tuesday they have agreed a master contract to trade UN approved carbon emissions between them, becoming the first Japanese companies to do so

TOKYO, Japan; June 19, 2008.- The first use in Japan of a standardised contract scheme — already popular in Europe, the world’s largest carbon market — is a preemptive move as the market for such offsets is expected to grow in the coming years to fight global warming.

The Kyoto Protocol’s first phase, obliging many industrial nations to curb emissions, started this year. The Kyoto pact expires at the end of 2012 and the goal for a successor pact, now under discussion, is to bind major emitters to emissions cuts.

Marubeni, a major emissions trader in Japan and Europe, said the two firms made a forward contract in late May on an undisclosed amount of emissions offsets to be delivered by the end of 2008, marking the first tranche of the International Swap Dealers Association (ISDA) master contract between them.

Japan was one of the first countries to connect to the United Nations global carbon trading system, called the International Transaction Log, which allows the tracking and trading of such offsets, Certified Emissions Reductions (CERs).

Several Japanese companies have taken delivery of CERs, generated and traded under the Kyoto Protocol’s Clean Development Mechanism scheme, meant to be a key way of financing emissions cuts in the developing world.

Transactions are basically tailor-made for those who initially receive CERs, the offsets derived from rich nations’ investment in green projects in developing countries.

But standardised transactions are useful for secondary users to help them make swift transactions and thus provide liquidity, analysts said.

Unlike in Europe, where derivatives on CERs are listed on exchanges, Japan does not yet have a common place to trade.

But the connection of the European Union emissions trading scheme to the UN system in the coming months is expected to bolster trading of CERs in a secondary market across the globe. Lately, Japan has been looking to broaden its range of available financial products in order to meet demand from investors and boost the competitiveness of its capital markets.

A bill passed by Japan’s parliament earlier this month makes it possible for banks and other firms to engage in emissions trading.

(Reuters)

Enlaces Relacionados

• JAPAN SAYS TO CONSIDER EMISSIONS TRADING SYSTEM
• JAPAN CARBON TRADE TARGETS TO BE VOLUNTARY
• JAPAN EMISSIONS TO RISE, REACHING KYOTO GOALS HARD
• JAPAN EMISSIONS TO RISE, KYOTO TARGET AT RISK - PAPER
• JAPAN SAYS CAN MEET KYOTO GOALS