CER Market Information:

FAQs

• When will CERs be delivered?
• Who can use secondary CERs?
• What are “secondary CERs”?
• What are “primary” CERs?

What is the ITL?

The International Transaction Log enables the forwarding of CERs from a Holding Account on the CDM registry into an EU registry of the same country. Without the ITL SecCERs can't physically be delivered into an EU registry.

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When will CERs be delivered?

CERs can only be "delivered" once the ITL allows for the transfer of CERs. SecCERs therefore will be offered for delivery after the ITL becomes operational.

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Who can use secondary CERs?

In the first phase any EU operator can use any number of CERs for compliance. The second phase will see a cap on the volume of CERs allowed for compliance use. On which registry do secondary CERs trade? Currently the interest is concentrated in the UK and Dutch registries. However, other registries can be considered subject to review from both buyer and seller.

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What are “secondary CERs”?

Generally this term refers to CERs that can be bought or sold based on a standard contract, similar to EU Allowances. Because the Seller or Buyer are investment grade companies, transactions for CERs can be executed without having to worry about any of the risks typically associated with CDM transactions.

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What are “primary” CERs?

Although there is no standard definition, common understanding of "primary CERs" refers to Certified Emission Reductions that will be issued to a Project Participant in the underlying CDM project. Hereby the underlying purchase contract is custom tailored to match the specific project risks, which is also reflected in the pricing of these CERs. The higher the project risks the lower the purchase price. Such a transaction normally encompasses that the buyer is purchasing a future multi-year stream of CERs that will be issued annually directly into the Buyers holding account at the CDM Executive Board.

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