More than 692,000 CER carbon credits have been sold at auction by the Asia Carbon Exchange in Singapore, changing hands for €10.40 ($US14.15).

The ACX auction held over April 17 and 18 saw the CERs, certified emissions reductions to be produced from a Chinese hydro-electric power project, sold in a deal that involved upfront payments.

Like many CER transactions, the CERs are yet to be issued and will be generated by the project owners over the course of the Kyoto commitment period from 2008 to 2012. Buyer and seller negotiate emission reduction purchase agreements (ERPAs) to cover the future delivery of the credits.

Under the Kyoto Protocol’s Clean Development Mechanism (CDM), governments and companies in the industrialised world can buy CER credits from emission reduction projects in the developing world to go towards their Kyoto or domestic carbon reduction targets.

Prices for yet to be generated CERs generally fetch lower prices than those already issued from projects because of the risk the project might fail to deliver.

ACX says the range of prices bid by CER buyers in its latest auction ranged from around €10 for projects that have reached the validation stage to €13 for CERs that have been already issued. The prices being asked by sellers ranged from €10.50 for CERs from projects at validation stage to €16 for issued CERs.

The ACX offers the only the exchange market place for the trade in CERs. All other CER transactions are 'bilateral' trades directly negotiated between buyer and seller.

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