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LONDON (Alliance News) - BP PLC has struck a deal with a local power company in China for the largest carbon permit buyback contract in the short history of the country's relatively new carbon market, Reuters reported on Monday.
Citing the China Emission Exchange in Shenzhen, one of the China's seven pilot carbon bourses, Reuters said Shenzen Energy must repurchase 4.0 million permits that it sold to BP by June 4 under the GBP11.0 million contract.
The deal gives BP the opportunity to trade the permits it has bought in secondary markets, while giving Shenzhen Energy access to liquidity.
"It is not surprising for BP, which has many facilities in China, to set foot here early. And... (it) helps the permit owner to raise capital," said Lin Yin, a spokeswoman at the exchange, according to Reuters.
The bourse said BP had settled the purchase in renminbi through its offshore account. The Shenzhen exchange is currently the only pilot scheme that allows unlimited trade in all currencies, while the other pilots have tightened approval of foreign account registration after Beijing launched renminbi exchange reforms last August.
Other oil companies like Royal Dutch Shell PLC have entered the Shenzhen exchange, as well as those in Guangdong and Shanghai, which are relatively open to international players, Reuters said.
BP is also seeking another deal for 400,000 carbon offset credits known as Chinese Certificate Emissions Reduction, several people familiar with the matter told Reuters.
http://uk.reuters.com/article/uk-china-carbontrading-idUKKCN0WN09X
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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