Thai Carbon Credit Trading in Development

Photo: The Soneva SLOW LIFE Trust

Photo: Adam Oswell/SLOW LIFE Foundation

The Thailand Greenhouse Gas Management Organization (TGO) is introducing a standard to regulate carbon credit trading under the Thailand Voluntary Emission Reduction (T-VER) scheme.

Credits under T-VER will be open to trading locally next year.

221 CDM projects
T-VER has been developed as a local carbon offset programme using the internationally recognised methodology of measuring carbon emissions based on Clean Development Mechanism (CDM) sets from the Kyoto Protocol, US carbon market and Gold Standard Foundation based in Switzerland.

The TGO will introduce a measurement, reporting and verification system to standardise carbon credit transactions for targeted buyers, the government and private companies.

The TGO has so far approved 221 CDM projects.

T-VER is one of three projects introduced in the country’s voluntary carbon market, which is aimed at mitigating greenhouse gas emissions.

The other two are the Voluntary Emission Reduction (VER) programme and the Thailand Voluntary Emission Trading Scheme.

Projects eligible under T-VER include energy efficiency, alternative and renewable energy, solid waste and transport management, forestry and green areas, and agriculture.

The price of carbon credits and in particular CDM has decline sharply around the world. Prices of VER credits has remained resonably strong with average prices of USD 6 last year.

What the price of T-VER credits will be, will depend on the market situation, buyer discretion or arrangements between participants.

An important factor of the carbon programmes in Asia is the fact that they are designed to be comparable down the line throughout the continent, meaning T-VER credits can be traded elsewhere on the continent too.

It then remains to be seen if Thai businesses will buy credits to offset their emissions as part of their corporate social responsibility programme or government tax incentive.

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2 responses to “Thai Carbon Credit Trading in Development

  1. You wrote:
    “The price of carbon credits and in particular CDM has decline sharply around the world. Prices of VER credits has remained resonably strong with average prices of USD 6 last year.”

    Are you saying that prices of VER is higher than CDM issued CER???

    “3. What are the positives and negatives of the CDM versus the Voluntary Carbon Market?

    The CDM is a robust standard that is strictly regulated by the UNFCCC. Due to this, carbon credits under the CDM have a much higher value. However, the CDM process can sometimes be long and complicated.

    The Voluntary Carbon Market is not regulated by one regulator, but by a number of different organizations with different standards. This lower level of regulation results in a lower price per carbon credit. However, the voluntary carbon market process can be shorter and more flexible. This may be beneficial for smaller projects or projects types that are not applicable under the CDM. Many forestry or land use/land change projects are done under the voluntary carbon market.

    4. What is the value of a CER and a VER?

    There are two types of CERs and VERs – primary and secondary. Primary carbon credits are purchased from projects that are not yet operating; the credits are often forward sold, based on the expectation of credits that a project will generate. Secondary credits are those that have already been issued.The price of a primary carbon credit depends on a number of factors, mainly pertaining to the
    risk associated with the project. Different factors affecting the risk of the project could be: sector, location, size, experience of project developers in implementation and monitoring, applicability of approved UNFCCC or voluntary carbon market methodologies, etc. As primary carbon credit prices vary per project, they are not publically available. One good source of prices of (estimated) primary and secondary CER prices is the Idea Carbon pCER Index. Thomson Reuters Carbon Market Community list secondary CER prices. VER
    prices are unknown but are typically a maximum of 50% of the prices of CERs.”

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