BEIJING, Sept 4 (Reuters Point Carbon) - Myanmar this week signed a deal to develop carbon-cutting projects under the U.N. Clean Development Mechanism (CDM) with China’s Sunshine Kaidi New Energy Group, a technology investment firm, Chinese media reported.
Under the agreement, Sunshine Kaidi will assist Myanmar in determining the potential of developing CDM projects in the country and fund project development, news agency Xinhua reported.
The CDM, one of the so-called flexible mechanisms of the Kyoto Protocol, allows projects in developing countries that cut greenhouse gas emissions to generate carbon credits, which can be sold to developed-nation governments and companies seeking to meet emission targets.
Once a multi-billion dollar market, the CDM has suffered a 90-percent price drop over the last two-and-a-half years as the economic crisis and weak climate ambitions in rich countries have left the market over-supplied by billions of permits this decade.
Europe, the biggest buyer of CDM credits, introduced a new rule this year that limits eligibility for new projects to those located in least developed countries (LDCs), driving project development in major CDM countries such as China and India to a near stand-still.
As one of 10 Asian LDCs, Myanmar would qualify to sell credits to the European carbon market, as part of the country’s rapidly growing economic interaction with western nations, many of whom boycotted Myanmar until recently.
CDM credits currently trade at just below 60 euro cents per tonne of carbon dioxide equivalent in the EU market, an unprofitable level of return for many project types, analysts say.
One Myanmar-based CDM project has so far been approved by the U.N., while six more are in early stages of development, according to a Thomson Reuters Point Carbon project database.
(Additional reporting by Kathy Chen)