Deal to acquire primary carbon credits

Westpac announced on 23 June the completion of a deal with Perenia whereby the bank will off-take Primary Certified Emission Reductions (CERs) generated by a Clean Development Mechanism (CDM) registered hydro-electric project in northern India.

The CDM is a system under the Kyoto Protocol that enables emission reduction projects in the developing world to generate carbon credits or CERs that can then be sold to other parties to assist in meeting their carbon liability.

Director of Commodities, Carbon & Energy Mike McKensey said that the deal provides further evidence of Westpac’s commitment to developing a full suite of traded carbon products that businesses can use to efficiently manage their carbon position.

“Accessing CERs is likely to be an important part of managing a carbon liability in Australia,” McKensey said. “For Westpac, it is important that we have the capability to provide customers with the full suite of carbon products. Accessing primary CERs is one of the more difficult but desirable carbon products that are part of our offering.”

Michael Wiener, Perenia’s Director of Operations, said that Perenia was pleased to be providing CERs from its portfolio of emission reduction projects to an Australian counterparty.

“The revenue from the sale of the CERs has supported the development of the hydropower project in India, contributing to the environmental and social development of the region,” Wiener said. “While the CERs provide a flexible, low-risk and cost-effective means for a business to manage its carbon liability.

“This is the first transaction that Perenia and Westpac have completed and we look forward to further developing that relationship as the carbon market in Australia matures,” Wiener further commented.