December 31, 2014 / 10:12 AM / 4 years ago

Shanghai companies launch 200 mln yuan carbon fund

BEIJING, Dec 31 (Reuters) - Two Shanghai-based companies launched a 200 million yuan ($32 mln) fund on Wednesday to invest in projects that generate carbon credits for China’s fledgeling carbon market.

The fund, operated by a subsidiary of Haitong Securities and project developer Treasure Carbon, will sell offsets known as Chinese Certified Emissions Reductions (CCERs) to power companies and manufacturers facing emission caps under China’s carbon market.

“The fund will bolster investment into new energy and conservation projects, and lay a solid foundation for the national market,” the companies said in a statement.

Treasure Carbon also a announced an option contract with state-owned China General Nuclear to sell 2 million CCERs over the next year, though that deal was made separate from the fund.

China is the world’s biggest emitter of climate-changing greenhouse gases but has launched seven pilot emission markets in an attempt to slow the rapid growth in emissions.

The central government plans to gradually shift to a national market, set to be the world’s biggest, starting in 2016.

The pilot markets have been plagued with low liquidity so far, but Beijing and local governments are encouraging trading houses and big emitters to play a bigger role.

Last month state-owned power generator Huaneng launched a 30 million yuan fund that will trade permits in Hubei province.

In recent months there has also been a string of announcements from banks that grant loans using emission permits as collateral, indicating that they are following the government’s encouragement. (Reporting by Stian Reklev and Kathy Chen; Editing by David Goodman)

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