Four carbon trading projects to be approved soon

Shobana Kesava, Straits Times 15 Oct 08;

FOUR projects developed here worth up to $235 million could soon be approved by the global body charged with ruling on greenhouse-cutting projects that may be traded on major carbon markets.

Senior Minister of State for Trade and Industry S. Iswaran, who gave this estimate, announced that the Singapore projects were set to get the green light from the United Nations Framework Convention on Climate Change.

He was speaking at a global climate change and sustainability conference yesterday.

The projects could cut annual carbon emissions here by about 533 kilotonnes a year, said the National Environment Agency's (NEA) website.

One firm, Bee Joo Industries is set to qualify for a project which converts plant waste into compost and generates power from the heat.

IUT Global, which recycles food waste as compost and an energy source while minimising greenhouse gases, could also see approvals by year-end.

Two other projects are being reviewed by the NEA, which determines if a project is ready to be considered by the UN. They are Power Seraya, for switching from fuel oil to natural gas, and Kim Hock Corp, which recycles scrap metal.

The green business community here is concerned that the global financial turmoil may divert attention from long-term environmental goals.

Nominated MP and managing director of IUT Global Edwin Khew said: 'There used to be an article every day in the newspapers on renewable energy but there hasn't been even one in the last 10.'

However, Mr Iswaran told The Straits Times that environmental businesses could have even better long-term prospects than some others.

'Alternative energy is in its early stages and the industry will be able to take note of the market situation and calibrate accordingly,' he said.

He added that government regulations to encourage clean technology companies to be based here have also ensured long-term measures help make such businesses sustainable in Singapore.

An analyst at the climate change conference yesterday, Mr William Byun, senior vice-president at Sindicatum Carbon Capital, said the carbon market was very volatile but still safer than other markets.

The carbon market was in its early growth phase, largely driven by regulatory requirements, he said. This includes the commitments by developed countries to cut carbon emissions.

'There would be insulation from the rest of the financial markets because countries still have targets to meet in the long term,' he said.

Certified emission cuts on the secondary market set for delivery in December were trading last night at ¥19.05 (S$38) on the European Climate Exchange.

The global carbon market grew to about ¥47 billion last year, more than double in 2006, according to a World Bank report in May this year.

Green push on track despite economic downturn: Iswaran
Jamie Lee, Business Times 15 Oct 08;

SINGAPORE'S push into the renewable energy sector is unlikely to be derailed by the economic downturn, Senior Minister of State for Trade and Industry S Iswaran said yesterday.

'You have got to distinguish between fundamental, long-term policies, projects and programmes, as opposed to what we are seeing - gyrations in the market in the short term,' Mr Iswaran told reporters on the sidelines of a climate change conference.

'Some short-term market volatility might affect some of the momentum in the near term among the private companies because they are trying to sort out some of their more core businesses,' he said.

'But in the medium to long term, these are areas where there is tremendous potential. And I think the initiatives, whether it is in the public sector or private sector, will continue, because it makes economic sense and will ultimately strengthen competitiveness.'

Mr Iswaran said that several Clean Development Mechanism (CDM) projects are in the pipeline in Singapore. There are now four pending projects, with carbon credits potentially worth $235 million.

A senior executive at Sindicatum Carbon Capital, a London-based company that invests in carbon projects, told yesterday's conference that the financial market crisis could throw up merger and acquisition (M&A) opportunities in the renewable energy sector.

A fall in market valuations of green energy companies has made their assets attractive compared with assets up for sale in the financial markets, said Sindicatum senior vice- president William Byun.

'Instead of greenfield investments, maybe there will be more M&A opportunities, which will be more interesting in the short term, or a hybrid between the two,' he said.

'It may be easier to just buy an existing company or plant than to build a green field. Prices have gone down so much that there are more bargains out there,' he told reporters later.

Funding is likely to emerge when the tight credit market unwinds, he said. 'There has been a significant destruction of wealth, for sure. But at the same time, there is still a lot of liquidity out there which has been stuck in the system.'

'I get the feeling things that are very asset-heavy, especially power plants, renewable plants, will be the first thing that you would want to finance, as opposed to purely financial instruments,' he said, adding that finance might not necessarily come from Asia, which is said to be in a stronger financial position.

The whole carbon market has been shielded from the financial crisis because it remains a niche area, he noted.

'A lot of what I see in the news are like watching some kind of a horror movie. But it doesn't affect (me) directly. It's on the screen.'