The nascent market for Emissions Trading Scheme (ETS) carbon credits has moved up another step, with the first NZU carbon credits now up for public auction.

Auction site Trade Me is currently the only local public platform for trading carbon credits, other than buying directly from a forest owner or broker, although the NZX has 180 customers on its TZ1 carbon trading registry that it expects to be trading by the end of the year – after the government reports back on the ETS around September or October.

Budding Christchurch forestry entrepreneur Peter Weir owns 40ha of forest, works in the forestry industry, and has 200 units available in the first listing of ETS carbon credits on TradeMe.

While voluntary units have been sold on TradeMe before, Mr Weir’s are the first New Zealand ETS units to be offered on a public market platform following their April 1 issuance.

Mr Weir previously tried to list a voluntary market sale on Trade Me, which led to meetings with Trade Me staff and ultimately, a temporary block for carbon credit auctions.

Trade Me general counsel Christine Turner says voluntary units are typically offered in quite small parcels, say of 20 unit parcels for $20 a unit, and would usually be bought by people in households and organisations that want to offset their emissions and become carbon neutral.

The market for the ETS credits will be a little different, she says. “It can include all of those people as well, but it can also include buyers who expect to have obligations under the New Zealand Emissions Trading Scheme such as electricity companies and so on, oil companies, industrial processors, the stationary energy sector. Those are the sorts of organisations that the Emissions Trading Scheme legislation proposes to cover in future years.”

Mr Weir believes the market is currently in a price discovery phase meaning an auction will be useful.  Brokers are currently selling some secondary market units around $NZ28 per tonne “which gives you an indication of roughly where my reserve might be,” Mr Weir says.

er of TZ1 chief executive Mark Franklin says there are 30 million credits in total on its registry, although most of them are voluntary units. Mr Franklin is dismissive of Trade Me’s foray into the carbon trading arena, arguing that TradeMe carbon trading will never have the scale or functionality of TZ1.

“Buying credits on TradeMe is not really trading carbon credits. Doing this stuff properly is all about having a platform for futures and options trading as well, because most people in this country, or most compliance buyers, have to actually get coverage going forward," says Mr Franklin.

Most of the customers on the TZ1 registry are large and based in Europe and the US, with some of them companies such as the American carbon registry.

“[But] It’s a really, really complex area, and there’s not that many people in this country who actually know what’s going on. It’s really on the edge, and it’s more on the edge than what we give it credit for because there’s some global rules that haven’t even been sorted out yet. We don’t even know what the answer to the question is; in some ways we don’t even know what the question is.