The newsletter summarizes the latest news and developments in the carbon market from the previous month. It highlights that CDM project registration and issuance reached record levels in June. The EU clarified that carbon credits generated by CPAs added to registered PoAs after 2012 will still be eligible under Phase III of the EU ETS. Analysts have revised down CER price projections for the current and next EU ETS phase to around €15. In India, the CERC has proposed reducing REC prices for the upcoming fiscal year and the country remains an attractive destination for renewable energy investment.

1. General Carbon Newsletter
MONTHLY ENVIRONMENTAL COMMODITIES NEWSLETTER JULY 2011, ISSUE:05
Point of View
PROJECT HIGHLIGHTS
In June, 169 new CDM projects
The last month witnessed frantic trading activity in the entered the Pipeline.
carbon market with significant volatility in CER prices.
News flow from Greece caused further pressure on Along with Gambia, Burkina
prices with expectation that Greece would sell EUAs. Faso, and Senegal, Togo is
CDM project flow continued to surprise the market with already participating in the multi-
record numbers of new projects and issuances. The country POA “Promoting Efficient
CDM EB came up with clarifications on cost of equity in Stove Dissemination and Use in
investment analysis apart from other moves aimed at West Africa”.
reducing validator liability in PoAs.
Four new POAs entered the CDM
pipeline.
A recommendation by the Meth Panel has increased the
registration risk of supercritical technology based power
Five new small-scale approved
generation projects (coal based). The Meth Panel note CDM methodologies and an
analyses difference in CER estimate of various projects Afforestation / Reforestation
and recommends placing the methodology on hold which methodology have been added to
will increase the risk of 25 large projects totaling 30 the CDM system.
million offsets.
Analysts were busy updating CER supply forecast based REC PRICE WATCH
on the latest EB decisions while reducing price 29th June 2011 Session
projections for the current phase and next phase of EU
IEX: Price (Volume)
ETS. Revised estimates place the CER price range for
the next phase at close to EUR 15 compared to EUR 20, Non solar -INR 1,505 (15,902)
projected earlier. No progress was witnessed at the Solar - (Not traded)
negotiation process, while bilateral programmes continue
to grab attention. PXIL: Price (Volume)
Non solar -INR 1,500 (483)
Solar - (Not traded)
VCS VER PRICE WATCH
Best,
India, China:
Satish Kashyap Renewables, EE
Pre 2008 vintages
US$ 0.50- 1.00
Post 2008 vintages
US$ 1.00-2.75
Renewables, EE- Pre CDM
Pre 2008 vintages
US$ 0.50-2.00
Post 2008 vintages

2. US$ 2.00-3.50
Industrial gases, others
Pre 2008 vintages
US$ 0.25-0.50
Post 2008 vintages
US$ 0.50-1.00
Post 2012 CPAs from Non LDCs acceptable under EU
ETS Phase III
Rest of Asia, Africa:
The European Commission clarified that it will accept Renewables, EE
carbon credits generated under the programmatic CDM Pre 2008 vintages
approach even if the component project activities (CPAs) US$ 1.00-2.00
are added post 2012. The clarification is applicable for only Post 2008 vintages
US$ 2.00-4.00
those PoAs (also called Programmes of Activities or
st
Programmatic CDM) which are registered before 1 Jan Renewables, EE- Pre CDM
2013. Thus the CERs generated from such projects can be Pre 2008 vintages
used for compliance purpose in the next phase (2013-20) US$ 1.50-3.00
of the EU ETS which is the largest carbon credit market. A Post 2008 vintages
CDM PoA approach is different to the normal CDM project US$ 2.00-5.00
activity approach in the sense that unlimited number of
similar technology projects (called CPAs) can be added Industrial gases, others
Pre 2008 vintages
into the PoA after the registration of the PoA.
US$ 0.25-1.00
The Article 11a of the EU ETS Directive 2003-87-EC lays Post 2008 vintages
restrictions on CDM projects for compliance purposes US$ 0.50-1.00
under the EU ETS Phase III. As per the Directive, projects
not hosted by a least developed country (LDC) should be
registered before 2013 in order for their CERs to be
considered valid under the trading scheme. The market till OTHER NEWS
now was seeking clarity on this subject as the additional
CPAs added later into a PoA do not undergo through a CARBON OFFSETS FALL BELOW
registration process but are only subjected to a
10 EUROS, NEW 2-YEAR LOW
consistency check by the DOE before their inclusion into
the PoA. Thus as per this new clarification if a PoA from
Non-LDC is registered before 2013, additional CPAs CARBON CREDITS: UN PANEL
added into the PoA even after 2012 will be marketable in FOR TAKING THERMAL PLANTS
the European market.
OFF LIST
The clarification which was issued in response to a query
by PD-Forum does also highlights the authority of the
Commission to propose appropriate regulatory measures EU STANDS BY CARBON TRADE
in case the application of this clarification goes against the IN CLIMATE FIGHT
spirit of its original Directive regarding restriction in
allowing post 2012 projects only from LDCs.
INDIA, US RELEASE FUNDS TO
BOOST CLEAN ENERGY
TRADERS „IN GOOD FAITH‟ MAY
WIN TITLE OF STOLEN CARBON,
REC Market Update
EU SAYS
The REC trading session in June resulted in REC price of
1505 on IEX and 1500 on PXIL. The cleared volume was £7BN WINDFALL FOR UK
16,385 across the exchanges. While buy bids were for a UTILITIES FROM CARBON PRICE
volume of 82,002 across both exchanges, it looks like the
FLOOR
price view is cemented close to the floor price. The trading
sessions in April, May and June have witnessed REC price
of 1500, clearly pointing to a medium term trend on pricing. GE AWARDS $63 MILLION TO 10

3. SOLAR, HOME EFFICIENCY
While registration volume of new projects has increased in
STARTUPS
the last few months, the overall volume is lower than most
analyst expectations. In June, Himachal Pradesh became
the second state in India to announce APPC, which is GOOGLE, SOROS INVEST $25
needed to increase project flow in RECs. MILLION IN ENERGY EFFICIENCY
COMPANY
130 projects have been accredited in India out of which
only 68 projects are registered. Maharashtra leads the
table with 75 accredited projects, followed by 20 Projects AUSTRALIA CARBON TAX
accredited from Tamil Nadu. The frequency of new Wind SPARKS CONTROVERSY
projects entering the system has increased with almost 85
wind projects accredited till date.
CARBON STORAGE PROJECT TO
While REC volume has increased, a number of challenges BE ESTABLISHED NEAR COLLIE
need to be addressed. Clarifications on captive
consumption are expected from Tamil Nadu, which will be NEARLY HALF UK'S BIGGEST
key to assess the volume of supply that will come from
COMPANIES FAILING TO ACT ON
existing projects. While the first project from UP has been
registered, many states are yet to open their score. CARBON EMISSIONS LAW
Enforcement of REC obligations on DISCOMs and
obligated entities will be key to future growth of the market. ENERGY GIANTS' PLAN FOR NEW
SCOTS ONSHORE CO2 PIPELINE
CARBON TAX DEBATE DRIVING
AUSSIE INVESTORS AWAY
India News
GROUP FILES SUIT TO STOP NY
CERC proposes 6.7% to 17.9% reduction in Indian REC
CARBON-TRADING PROGRAM
prices for FY2012-13
The Central Electricity Regulatory Commission has issued DUBBO MEETING OPPOSES
a suo motu petition with reference to the determination of CARBON TAX
the floor and forbearance price of the Renewable Energy
Certificates (RECs) for the financial year 2012-13. CARBON CAPTURE FUNDING
APPROVED
India to be third largest investment destination for
renewables this year: KPMG CARBON TAX TO HIKE
India is the third most favored destination globally for ELECTRICITY PRICE
investments in the renewable energy sector and will also
be a major source of new entrants into the sector, behind CALIFORNIA PROPOSES
the US and China, according to a survey released today by DELAYING CARBON MARKET A
global consulting firm KPMG.
YEAR
Nalco to set up Rs 274 Cr wind power project in AP
As part of its diversification plans, the aluminium major EUROPE CUTS CO2 EMISSIONS
National Aluminium Company Limited (NALCO), has FROM CARS BY 3.7 PERCENT
decided to start a 50.4 MW Wind Power Project at
Gandikota in Kadapa district of Andhra Pradesh. The
SHELL GETS C$865 MILLION FOR
Navratna PSU has been endeavouring to foray into other
metals and energy sectors. CANADIAN CO2 PROJECT

4. OPIC pours $500m into „renewable resources‟ funds
The US Overseas Private Investment Corporation (OPIC)
has approved $500 million in financing for five funds
investing in the renewable energy and agriculture sectors EDITORS
in developing countries. Rameez Shaikh,
rameez.shaikh@general-
carbon.com
IBM Teams With Bureau of Energy Efficiency to prepare
Sagar Mankar,
for India‟s first smart grid project sagar.mankar@general-
IBM has announced collaboration with The Bureau of carbon.com
Energy Efficiency (BEE) in India to create the country‟s
first smart grid project. Together they will create a cost
GERERAL CARBON PTE LTD
benefit analysis for smart grid activities as part of the 16 RAFFLES QUAY, #33-03 HONG
National Mission for Enhanced Energy Efficiency LEONG BUILDING,
(NMEEE). SINGAPORE 048581.
Energy efficiency industry to get incentives from the
government
The government is set to provide incentives to the
emerging energy efficiency industry including Light
Emitting Diode (LED) under the National Mission for
Enhanced Energy Efficiency (NMEEE). This newsletter is brought to you
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