CantorCO2e Launches First Internet CER Auction
CantorCO2e Limited announced today that it has launched an electronic internet-accessed auction platform for the sale and purchase of issued Certified Emission Reductions (CERs). The new service was unveiled today to an audience of the leading emission trading participants from Europe, Japan and the US; including banks, energy utilities and hedge funds; at the Park Lane Hilton Hotel in London. “The CantorCO2e auction service has been designed to allow CER buyers, big and small, to participate in the auction on a level playing field with each other. Additionally, many of the barriers to trading CERs that currently exist in the market, such as the requirement for buyers to become project participants in order to take delivery of the CERs, are eliminated when using the CantorCO2e auction.” said James Emanuel, Commercial Director at CantorCO2e.
CantorCO2e is holding the first ever internet auction where a binding contract for the sale of the CERs is complete immediately following the close of the auction. While other companies have offered to sell CERs by auction in the past, these previous offerings involved bidding for the right to enter into negotiations with the seller of the CERs, resulting in only a potential to transact at some time in the future. These previous offerings therefore have offered no guarantee of a consummated transaction.
“CantorCO2e believes that its unique auction platform will be the fastest and most efficient market mechanism for buying issued CERs direct from project developers. Successful buyers will receive the CERs within days of the auction close and the seller is paid equally quickly. This new service marks another important milestone in the evolution of global emissions trading.” added Mr. Emanuel.
On 2nd October 2008 CantorCO2e will hold the first in a series of auctions. The first auction will be for 260,000 CERs generated from three biomass projects owned by Arauco, the largest forestry company in Latin America. The CERs will be delivered to successful buyers via the Swiss national emission registry.
“The issuance and selling of CERs is a positive consequence of our integral use of the forest policy, which implies the use of forest biomass residue to produce energy. When selling large quantities of CERs in the past, Arauco has always favoured dealing with one buyer for the total quantity in order to contain transaction costs, thus restricting demand to only buyers with the appetite for large volumes of CERs. The CantorCO2e Auction will allow Arauco to be matched with as many buyers as is necessary to achieve the best price without any additional work and no further transaction costs for Arauco. Arauco welcomes this innovative development in the market.” said Gianfranco Truffello, Chief Financial Officer of Arauco.
Sergio Vives, Head of CantorCO2e Chile, added “The CantorCO2e Auction platform has been warmly welcomed by our clients as it makes their route to market cheaper, quicker and easier. In the past our clients have encountered obstacles to selling issued CERs in the market but now the CantorCO2e Auction removes such obstacles. Now a seller need not accept multiple companies as project participants, thereby retaining absolute autonomy over its project. And, now a seller will avoid time delays in negotiating contracts with prospective buyers thereby avoiding exposure to price volatility in the interim period.”