LONDON - Investment bank Citi and French emissions exchange BlueNext sold at auction 400,000 Kyoto Protocol carbon offsets for 11.21 euros ($16.05) each, auction hosts BlueNext said late on Friday.

Under Kyoto's Joint Implementation scheme, companies can invest in clean energy projects in countries with greenhouse gas reduction targets under the global climate pact, and in return receive offsets called Emissions Reduction Units, or ERUs.

Companies regulated by the European Union Emissions Trading Scheme can use ERUs for compliance.

Although the auction raised 4.5 million euros in revenues, BlueNext would not confirm the identity of the buyers or the origin of the credits.

BlueNext said demand was equivalent to nearly 2 million tonnes of carbon dioxide.

It was the first ERU auction ever. It was oversubscribed and it went off without a hitch, Keiron Allen, BlueNext's marketing and communications director, told Reuters.

BlueNext is a joint venture between NYSE Euronext and France's state-owned Caisse des Depots.

The ERU market is small and trade historically has been dominated by opaque, over-the-counter deals.

The World Bank estimated the ERU market was worth just under $300 million in 2008, a far cry from Kyoto's $6.5 billion Clean Development Mechanism scheme, which funds projects in emerging countries like India and Brazil.

Almost 4.5 million ERUs have been issued so far, mainly to projects in eastern European countries like Ukraine and Hungary, meaning the auction represented around 9 percent of market's supply to date.

The auction's closing price was 22 cents lower than Friday's closing price of 11.43 euros for CDM offsets on BlueNext.

(Reporting by Michael Szabo; Editing by Walter Bagley)