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The Brazilian Mercantile & Futures Exchange and authorities of the City of São Paulo signed, on Tuesday, June the 5th, a contract in order to sell carbon through BM&F’s trading system. The credits generated by the Projeto de Aterro Sanitário Bandeirantes (a sanitary landfill), approximately 800 thousand tons of carbon, within the Clean Development Mechanism (CDM), will inaugurate the carbon trading system developed by BM&F. “BM&F’s participation in the trading of these credits will insure the process’ transparency and efficiency”, stated Gilberto Kassab, Mayor of São Paulo.
According to the Mayor, all the money generated with the carbon credits will be invested in the region surrounding the landfill, located in the district of Perus. BM&F’s Chairman, Manoel Felix Cintra Neto, highlighted the importance of the partnership to society: “The social aspect of the project is taken into account during the auction and may result in investors paying a higher price for the carbon credits”. According to BM&F’s Chairman, this will be the first auction of its kind in the spot market to take place in a regulated Exchange, approved by the UN and in accordance to the Kyoto Protocol guidelines. “It will also be the largest auction of carbon credits generated by a single project”, said Mr. Cintra Neto during the signing of the contract. BM&F will be responsible for the auction’s promotion, administration, and registration of participants, who will deposit collateral.
BM&F’s Carbon Market
BM&F’s Carbon Market will facilitate the access of interested parties to CDM projects; reduce the trading costs of this type of market; as well as contribute towards a more efficient price formation of carbon credits. The trading platform will act as a powerful carbon credit market instrument for both private and public companies, regardless of the size of the CDM project. BM&F’s Carbon Market will also allow an easy access for international carbon market participants. The auctions will be scheduled, in accordance to buyers and sellers, and disclosed through calls for tenders.
Carbon Funds
BM&F will begin to discuss with the market the viability of creating carbon funds in Brazil, modeled after similar international funds. The participation of such funds brings advantages to small and medium-sized projects, by giving these project scale gains comparable to larger projects.
