BM&FBOVESPA will conduct, on September 25, 2008, its second carbon credit auction for the sale of Certified Emission Reductions (CERs) held by the São Paulo Municipal Government. A total amount of 713,000 CERs will be auctioned in a single lot under the terms of the Clean Development Mechanism – 454.343 CERs from the Bandeirantes landfill Energy Project and 258.657 CERs from São João landfill Energy Project.
The internet-based auction (www.bmf.com.br/leilaocarbono) will be at 8:30 a.m. (Brasilia time) or (11:30 UCT). The minimum bid price will be disclosed on September 24, one day before the auction, and will be available on the BM&FBOVESPA website at 10 a.m., Brasilia time.
The financial settlement will be mediated by the BM&F Settlement Bank. The collateral of €400,000 (four hundred thousand Euros) must be pledged by all bidders by no later than five business days before the auction date. The Bank of Brazil will confirm the letters of credit to be issued by the banks listed in the Notice. Standby letters of credit must be submitted as collateral to the Bank of Brazil, London branch, in the city of London, United Kingdom.
About the landfills
The Bandeirantes landfill is located in the northern section of the city of São Paulo on an area of 150 hectares with a waste storage capacity of 35 million metric tons. In 2003, it was the first landfill of its kind to install a thermoelectric plant generating 170 thousand MW/h per annum.
Established in 1992, the São João landfill is located in the eastern section of the city of São Paulo on an area of 80 hectares. It receives 7 thousand tons of waste per day, and its thermoelectric plant production of 200 thousand MW/h per annum is equal to the annual energy consumption of a city of 400 thousand inhabitants.
Both of these landfills have installed systems to capture the gases produced by the decomposition of the urban waste they store. These gases, principally carbon dioxide and methane responsible for the greenhouse effect, are being used to produce electric energy.
The first carbon credit auction
The first carbon credit auction occurred on September 26, 2007. An equivalent of 808,450 tons of carbon dioxide, from the Bandeirantes landfill Energy Project, held by the São Paulo Municipal Government, was auctioned. The European Fortis Bank NV/SA bought the lot at €16.20 per metric ton of carbon. The São Paulo Municipal Government received an equivalent of €13.09 million (approximately BRL34 million). Fourteen institutions were authorized to take part in this auction – nine of which placed bids. The minimum bid was € 12.70 per metric ton.
According to the São Paulo Municipal Government, the proceeds from that auction are being used to improve the quality of life of the citizens living near the landfill – a new Plaza has already been built and there is a joint project under development by the Municipal Government and the Department of Parks and Green Areas (DEPAVE) which will be implemented during second semester of this year. It is currently in the licitation phase.
Access to the auction will be available at
http://www.bmf.com.br/portal/pages/MBRE/negociacao.asp
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BM&FBOVESPA Holds Its Second Carbon Credit Auction - The Auction Will Offer 713,000 CERs Held By The São Paulo Municipal Government
Date 29/08/2008