(Writesthrough, adds analyst’s comment, share price)
LONDON, Aug 28 (Reuters) - Project developer Camco CAMIN.L has auctioned 5.8 million tonnes of carbon offsets, for non-guaranteed delivery, to buyers aiming to use these to meet greenhouse gas emissions targets, the company said on Thursday.
Camco shares were up nearly 6 percent in morning trading at 58 pence ($1.07).
The offset auction was over-subscribed four times, the UK-based company said, suggesting an expectation that companies will struggle to meet their emissions targets under European Union and U.N. schemes.
Carbon offsets allow countries, companies or the public to pay someone else to cut greenhouse gas emissions on their behalf.
The combination of a fixed price per tonne plus a non-recourse up-front payment of 15 million euros ($22.19 million) valued the carbon offsets, called certified emission reductions (CERs), at more than 15 euros per tonne, Camco said.
Benchmark CERs for guaranteed December delivery CEREc1 were trading at 21.20 euros per tonne, up 33 cents or 1.6 percent, on the European Climate Exchange early on Thursday.
Camco’s auction sold CERs from nine projects. Not all of the projects had been registered yet by a U.N. judging panel, which explains the discount to guaranteed delivery prices.
The company added it is now planning to offer a second, smaller portfolio to a group of preferred buyers.
Camco has one of the biggest pipelines of projects which cut greenhouse gas emissions and so generate CERs for sale either to rich countries aiming to meet emissions targets under a U.N.-led, Kyoto Protocol scheme, or to companies which face emissions caps under the EU emissions trading scheme.
“This transaction underwrites our estimates that Camco will be the first carbon trader to generate positive cashflows in 2008 - thereby proving its business model,” said Gus Hochschild, analyst at Mirabaud Securities Limited, raising his share price target to 136p from 125p.
For a breakdown of offset holdings by investors and speculators please double-click here [ID:nLI551202] -- Additional reporting by Kumar Alagappan in Bangalore (Reporting by Gerard Wynn and Michael Szabo; editing by James Jukwey)