Haifa Chemicals to make $60m from selling emission credits

The banking group Citi has struck a long-term agreement with Haifa Chemicals to sell certified emission reduction (CER) quotas on behalf of the Israeli company. The accord was reached after Haifa Chemicals installed new technology to cut its greenhouse gas emissions.

Environmental technologies bought from the UK firm Johnson Matthey will earn Haifa Chemicals, which makes fertilizers and food additives, some 2.5 million CERs, which it plans to sell to factories that fail to meet their emissions quotas.

The agreement is expected to increase Haifa Chemicals' revenues by about $60 million, Citi said in a statement.

The long-term deal was signed under a $6.5 billion United Nations carbon trading scheme called the Clean Development Mechanism, which allows developed countries to trade CERs from developing countries to meet targets for cutting greenhouse gas emissions.

Haifa Chemicals was represented in the negotiations by the law firm Epstein, Rosenblum, Maoz.

Neil Korney, head of the trading desk at Citi Israel and a member of its management, commented that the Haifa Chemicals deal is just one of several Citi is handling in Israel, based on the international banking group's vast experience in the emissions trade.

Haifa Chemicals' chief executive Nadav Shachar said his company had «set for itself a strategic target for reducing greenhouse gases.

Under the Clean Development Mechanism, which was established under the Kyoto Protocol, each CER represents a ton of carbon dioxide-equivalent saved from being emitted and currently trades for around ?12.79 on the European Climate Exchange.