Thu Oct 20, 2005 11:30 AM ET
LONDON (Reuters) - A hydroelectric power project in Honduras received on Thursday the first carbon dioxide emission credits issued under Kyoto Protocol rules to encourage firms to invest in green schemes in developing countries.
The scheme was issued with the world's first "certified emissions reductions" (CERs) which can be traded internationally, in a move toward creating a global carbon trading market.
Under the Kyoto treaty, rich countries can invest in environmentally friendly schemes in developing nations and use the credits to offset requirements on their companies to reduce their greenhouse gas emissions.
Credits from the "La Esperanza" project have been sold to Italy and will be used by Italian firms covered by the European Union's emission trading scheme.
"These are the first credits to be issued. It has been a long and complicated process," said Pedro Moura Costa, managing director of EcoSecurities which managed the sale of the credits.
He added he expected the process to speed up rapidly as the mechanisms for issuing the CERs were now established.
The award of the credits brings into effect one of the key provisions of the protocol, called the "clean development mechanism".
These is designed to encourage the transfer of "low carbon" technology to developing countries that would not otherwise be able to afford it.
Analysts Point Carbon estimates CER market is currently worth $450 million and is expected to grow to $23 billion in the next five years.
The small Esperanza scheme, which will have a generating capacity of nearly 13 megawatts, will receive 47,800 tons of CERs with a value of up to 277,500 euros.
CERs are trading at between 4.50 and 7.50 euros a ton.
Carbon credits are trading at around 22 euros in the EU scheme which launched in January.
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