U.N. panel issues 20 million carbon offsets

LONDON (Reuters) - A United Nations panel overseeing trade in carbon offsets under the Kyoto Protocol decided late on Friday to issue 20 million tonnes of offsets, the information company Point Carbon reported.

The panel, known as the executive board, oversees a $20 billion trade in offsets which allows rich countries to meet greenhouse gas emission limits by paying for carbon cuts in developing nations.

The trade has been dominated by industrial projects which destroy a powerful greenhouse gas called HFC 23, a waste product from the manufacture of refrigerants, mostly in China and India.

The panel issued just under 20 million credits to 12 projects that destroy the waste gas HFC 23, despite a U.N. investigation into possible flaws in the way the projects account for their emissions cuts, called their “methodology.”

The latest instructions to issue credits will boost total offsets, called certified emissions reductions (CERs) supply by 4.4 percent to 477 million and increase the number issued this year by around 20 percent to 110 million, said Point Carbon, a news and information company owned by Thomson Reuters.

The stage of issuing carbon offsets is where the panel gives offsets to projects according to the amount of their emissions cuts, with 1 offset for every tonne of greenhouse gases abated.

The HFC projects had been placed under review until Friday, meaning they had to wait for their offsets.

The board rejected a request from just one of the reviewed projects, developers of the Quimobasicos HFC 23 destruction project in Mexico for 684,000 credits, but said this was for reasons unconnected to the probe.

In a separate move, the panel suspended the methodology that all HFC 23 projects use after a separate methodology panel found that the rules could lead to over-issuance of credits to some projects.

“We have put the methodology on hold with immediate effect to ensure there are no other projects that will use the original methodology,” said Clifford Mahlung, the chair of the executive board.

The methodology panel is expected to present the revised methodology in June 2011 at the board’s 61st meeting.