Brazil carbon credit auction ends without bidders

SAO PAULO (Reuters) - Latin America's first auction of voluntary carbon credits ended in Brazil on Thursday without a single bid, a sign that voluntary carbon markets may struggle to attract interest in the region.

Voluntary carbon offsets let individuals and companies compensate for their greenhouse gas emissions by funding projects that reduce emissions, in contrast to mandatory emission reduction credits that companies must comply with under global treaties.

BM&FBovespa, Brazil's principal stock exchange, said it received no bids for 180,000 tonnes of voluntary credits offered by nine ceramics factories that reduced carbon dioxide emissions by using biomass such as sugar cane bagasse and rice husks for fuel.

The ceramics factories could sell those credits later since they do not expire.

Brazil has no mandatory national cap on emissions except in the state of Sao Paulo where firms are allocated a limit, which must be adhered to on-site and cannot be met with the purchase of carbon credits.

Small numbers of businesses in Brazil sometimes purchase voluntary credits through individual negotiations with providers.

Voluntary credits are generally cheaper than those sold under the United Nations Clean Development Mechanism, or CDM, because they can be approved more quickly and are generally subject to less rigorous certification processes.

The absence of a legally binding global climate deal and a federal emissions trading scheme in the United States are standing in the way of growth in global emissions trading, analysts say.

(Reporting by Peter Murphy, Writing by Brian Ellsworth; Editing by Lisa Shumaker)