Brazil Exchange to Hold Carbon Credit Auction

Bovespa A total of 240,000 voluntary carbon units from projects managed by the Social Carbon Company will be auctioned on December 22 by the Brazilian Securities, Commodities and Futures Exchange, the BM&FBovespa. 

The emission reductions were generated from 11 renewable biomass projects administered by the Social Carbon Company in porcelain factories. These plants are located in the Brazilian states of São Paulo (cities of Panorama, Presidente Epitácio, Paulicéia), Pará (São Miguel do Guama), Pernambuco (Lajedo, Paudalho), Sergipe (Itabaiana), Minas Gerais (Ituiutaba), and Rio de Janeiro (Itaboraí­).

The projects reduce gas emissions by replacing gasoline with renewable biomass fuels like sugarcane bagasse, açaí­ seeds, and rice husks, among others. The carbon credits have been validated by certified entities authorized by the United Nations Framework Convention on Climate Change (UNFCCC).

The auction will be held in four sessions, with a lot traded per session. The initial bidding prices will be indicated by lots that vary in accordance with the vintages and are priced at 8.00 to 14.00 Brazilian reais per unit.

The first transaction will occur at 1 p.m. (Brazil Time) and will be carried out by BM&FBovespa's Carbon Credit Trading System. The financial settlement will be coordinated by Liquidez DTVM brokerage house.

The Brazilian Exchange has previously organized two carbon credit auctions in 2007 and 2008. Both auctions offered Certified Emissions Reductions (CERs), held by the São Paulo Municipal Government, and generated by the Bandeirantes and São João landfill projects.

The objective of BM&FBovespa's carbon market is to foment carbon credit trading in Brazil within an organized trading environment. It also provides Brazilian companies an opportunity to sell their GHG emission reduction projects in the country.

The Brazilian Securities, Commodities and Futures Exchange was created in 2008 with the integration between the Brazilian Mercantile & Futures Exchange (BM&F) and the São Paulo Stock Exchange (Bovespa).

Together, the companies have created one of the largest listed exchange groups in the world, the second in the Americas, and the leading exchange in Latin America.

The Social Carbon Company provides carbon management services to project developers in the Verified Emission Reduction (VER) market and applies Voluntary Carbon Standard (VCS) and Socialcarbon Methodology to implement carbon emission reduction projects in partnership with project developers.

The current list of projects includes the switching from non-renewable biomass as a fuel source to renewable biomass sources, energy efficiency, landfill and small-scale hydro-electricity.

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