Third of projects fail to win credits

The recession and inadequate project preparation have led to almost 30 per cent of projects under the United Nations’ carbon trading system failing to deliver any credits, according to a new report.

Projects to prevent emissions from waste, such as landfill gas capture, are the least likely to get all their credits. Only half of these projects come to fruition, according to Point Carbon, a consultancy.

Some 1,950 projects have been registered with the UN’s Clean Development Mechanism, which issues carbon credits under the Kyoto protocol. Each credit represents a tonne of carbon dioxide that was reduced, and they are awarded to projects such as wind farms and solar power generation, in developing countries. The credits are bought by rich countries, which can count them towards their targets to reduce emissions under Kyoto.

But there have been problems with the carbon trading system. For instance, as the Financial Times revealed this month, the future of numerous wind farm projects in China were thrown into doubt when the UN rejected the applications, alleging that the Chinese government was manipulating the process.

Arne Eik, CDM analysis manager at Point Carbon said: “This shows that many of the registered projects we previously considered delayed, or awaiting issuance, will never make it to issuance at all.

“There are two main reasons for this: problems with project finance caused by the economic downturn, and compounded by post-2012 uncertainty, and the fact that some projects have not been able to demonstrate emission reductions appropriately.”