April 2015 - The World Bank’s Pilot Auction Facility for Methane and Climate Change Mitigation (PAF) will support projects at risk by purchasing CERs and then setting them aside. The CERs will be bought at a guaranteed minimum price. This will come in the form of put options offered in competitive auctions. Germany, Switzerland, Sweden and the US have collectively pledged some USD 53 million to the PAF to date.
The first competitive auction will be held in June, offering USD 25 million in puts. The auction will focus primarily on waste management projects in which significant quantities of methane are released. During the auction, put options will be offered at a guaranteed fixed purchase price for a single tranche comprising 2,000 CERs. The winners must pay a small charge of USD 0.30 per CER, but then have the right to sell those CERS to the PAF according to a specific schedule over the next five years and at the price attained at the auction.
The World Bank has announced the criteria to be applied in selecting projects and programmes for its CER auctions:
More information about the selection criteria, including the list of eligible countries and CDM methodologies, is available on the PAF website. Details of the auctioning procedures will be publishing on the website shortly and an interactive Q&A webinar will be held on April 8.