Eco trader plunges on slowdown

By Fiona Harvey, Environment Correspondent
Published: September 12 2008 03:20

Shares in EcoSecurities plunged 14 per cent on Thursday in the latest sign of trouble in the carbon market.
It has been a torrid year for the carbon trader. In September 2007, its shares stood at more than 300p. On Thursday they closed at 66p.

EcoSecurities, which deals in carbon credits issued under the Kyoto protocol, said revenues for the six months to June 30 had more than doubled from €5.59m ($7.82m) to €13.4m and it had narrowed its pre-tax loss from €12m to €9.95m. The loss per share was 9.79 cents (14.16 cents).
However, investors were more concerned by the downbeat outlook for the company’s portfolio of carbon credits.
EcoSecurities suffered last year from having to write off a chunk of its carbon credit portfolio and there have been lengthy delays in the issue of some of its credits.
The company said that it was still experiencing serious delays and a slowdown in the number of new projects generating carbon credits.
Bruce Usher, chief executive, said: “The results are a mixed bag.” On the plus side, the appetite for carbon credits from buyers – mainly in Europe and Japan – was “stable and strong”. The price fetched by credits in the market was high, compared with historical prices, at about €20 each.
But on the negative side, Mr Usher admitted: “The portfolio has not grown much, and there are a lot of delays.”
Carbon credits are issued by the UN to operations that reduce carbon in the developing world, and the process for the issuance of credits is complex.
Projects must be independently verified and then the UN must certify that each one has passed its stringent standards before the credits can be issued.
Mr Usher said a shortage of verifiers meant his company had to wait as much as a year to have projects verified, and the cost of verification had doubled. The UN’s issuance process added further delays.
Copyright The Financial Times Limited 2008