Export credit agencies in the Netherlands, U.K. and Denmark are studying trading carbon dioxide emission credits as another source of income on projects they finance. Lars Kolte, managing director at Danish export credit agency Eksport Kredit Fonden in Copenhagen, said it is financing construction of three major wind farms with total capacity of 180 MW and wants to use carbon dioxide credits that these parks will likely be awarded to part finance loans. "We think that we can create financial flows from trading these emissions credits by using alternative energy sources," explained Kolte.
Similarly, the Dutch export finance agency is looking at trading carbon credits awarded to factories as well as power plants, according to Johan Schrijver, director for medium-term business for Gerling NCM in Amsterdam.
Wind farms and energy efficient factories are allocated carbon dioxide credits, which they can then sell, by proving to a United Nations commission that they have reduced carbon dioxide emissions versus a quota. Kolte hopes to be able to then trade these carbon credits with companies or government agencies as spot, forwards or futures. He added that he expected these markets to develop over the next few years.
A forward market exists within the European Union for cash settlement starting in 2005, when the legal framework will be put in place. An unratified European Union treaty is slated to come into effect in 2008 and would allow E.U. institutions to trade carbon credits outside the E.U.
A spokeswoman for the Export Credits Guarantee Department in London, said it is following the development of the market, but it is too early to use carbon credits as a secure funding source.
