Citi, BlueNext Hold First Ever Auction of Kyoto ERU's

Investment bank Citi and the environmental trading
exchange BlueNext announced today that they held the first-ever auction of Emissions Reduction Units (ERU) last Friday.

Emissions Reduction Units are created when companies invest in greenhouse gas reduction targets under the Kyoto Protocol. 

BlueNext auctioned 400,000 tons worth of credits at a
clearing price of EUR 11.21 per ton.

ERU’s are separate from Clean Development Mechanism credits (CDM) under the Kyoto protocol, which are to be traded by developed countries with emissions targets under Kyoto. 

ERU’s can be traded by companies regulated by the European Union Emissions Trading Scheme. The market for ERU’s at roughly $300 million in 2008 is much smaller than the $6.5 billion market for CDMs, according to Reuters.

Demand was reasonably high as the auction was 4.78 times over-subscribed, BlueNext said.

Serge Harry, CEO of BlueNext, said, "we are very pleased that Citi and Bluenext hosted the first ever
ERU auction. The amount auctioned represents almost 10% of all ERUs issued at present–so
this is a material moment. We of course look forward to hosting other auctions like this in the future."

"Until this auction there has been little trading activity and almost no price transparency for ERUs. This
auction is a step forward in providing the information necessary for both buyers and sellers to make
the investments in the underlying Joint Implementation projects that will expand the supply of ERUs."
said Garth Edward, head of emissions markets at Citi.

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