Carbon registries 'will dominate'

TZ1 chief executive Mark Franklin is confident that the Voluntary Carbon Standard will emerge as the dominant voluntary international carbon credit.

Yesterday TZ1, the NZ Exchange's carbon market subsidiary, was among four organisations appointed by VCS to run registries for the trading of its voluntary carbon credits. The others were France's Caisse des Depots, Bank of New York Mellon and North American market infrastructure provider APX.

Voluntary Carbon Standard is one of about 10 international types of voluntary carbon credits in a market that was worth US$330 million last year and is growing rapidly.

The voluntary market, where firms buy credits to offset emissions and become carbon neutral, is separate from compliance markets such as the European Union's and the emissions trading scheme being set up in New Zealand.

Currently voluntary credits were traded directly between organisations setting up carbonreduction projects and firms wanting to buy carbon credits, Mr Franklin said.

VCS, with headquarters in Europe, is the first to set up a registry model, meaning its credits would be able to be traded only through certified registries.

"There's a lot of standards that have grown up and what VCS is probably going to try and do is be an umbrella standard."

As the market matured it would not be acceptable to trade credits that were not registered, Mr Franklin said. "This is the way the market is going to pan out."

As one of the four VCS registries, TZ1 will provide identification, transparency, authenticity and traceability of carbon credits from origin and electronic transfer of ownership or retirement of credits when required.

"You clip the ticket through all of those processes," Mr Franklin said.

The VCS registries are set to go live in September.

In terms of potential revenue, becoming a registry was a significant opportunity for TZ1, Mr Franklin said, but he would not be more specific.

TZ1 would look to set up at least two international offices for the registry, probably in North America and Europe.

Meanwhile, TZ1 is aiming to launch its carbon market for the compliance sector - companies obliged to buy and sell credits by the government's emissions trading scheme - in the first quarter of 2009.

- © Fairfax NZ News