First Climate Seeks $136 Million for Carbon Credits After 2012

March 10 (Bloomberg) -- First Climate AG said it signed letters of intent with major European utilities to invest in projects that may generate emission credits good after 2012.

First Climate, a Frankfurt based developer of clean-energy projects, seeks 100 million euros ($136 million) from investors for a new fund, Martin Schulte, a director at First Climate said in a telephone interview today from Luxembourg Its first contract for post-2012 credits may be signed in the next three months, Schulte said.

Power stations and factories in the European Union’s cap- and-trade program are starting to demand offsets to meet emissions targets from 2012 through 2020. The United Nation’s Clean Development Mechanism awards credits that can be used in the EU system in exchange for funding of emission-reduction projects in developing nations.

European emitters “know they can’t sit on their hands and wait for more certainty” to come from an international climate agreement, Schulte said.

The EU’s cap-trade-system, started in 2005 as an outgrowth of the 1997 Kyoto Protocol, is the main program for cutting emissions in the 27-nation bloc through 2020. Covering about 11,000 facilities that produce energy or goods from paper to cement, the carbon trading program was designed to let markets determine the most cost-effective way to cut emissions believed to cause global warming.

First Climate, with offices in nine countries, said its post-2012 fund will “be picky” in choosing projects to create so-called Certified Emissions Reductions units. First Climate is also involved in a European Investment Bank initiative to alleviate uncertainty by investing in greenhouse-gas credits for delivery after 2012 after prices dropped earlier this year.

UN certified emissions reductions for delivery in December were little changed at 11.73 euros a metric ton today in London. CERS fell as low as 7.75 euros a metric ton last year as the recession lower industrial output curbed demand.

To contact the reporter on this story: Catherine Airlie in London at cairlie@bloomberg.net