New Delhi: A significant rise in crude oil prices spiked carbon credits futures up to 2.33% in the domestic market.
At 1300 hrs, December delivery of carbon credits on NCDEX counter rose by 2.33% to Rs 1,592 per Carbon Emission Reduction (CER).
While on MCX, the most-active November contract gained 1.28% to Rs 1,579 per CER.
“Due to the direct correlation between crude oil and carbon, CER prices are keeping pace with the recent increases in crude oil,” an analyst with Religare Commodities told PTI.
Crude oil prices on New York Mercantile Exchange have been rising in the last one week. They recorded a new high of over $144 ber barrel, after US data showed a decline in crude inventories.
“Higher crude oil prices propel great demand for alternative energy like coal and in turn boosts CER prices,” Karvy Comtrade Research Head Harish G said.
Even CER prices on European Climate Exchange are ruling firm, he said, adding as major pollutants being the transportation sector, the energy price have been co-related with carbon credits.
Carbon credits which are traded as Certified Emission Reduction (CER) on the commodity bourses are issued by the Clean Development Mechanism (CDM) executive board for emission reductions achieved by CM projects and verified under the rules of the Kyoto Protocol.
India is the second largest seller of carbon credits in the global market. Total 295 Indian companies have registered with CDM for carbon credit trading.