JERUSALEM - Haifa Chemicals and Citi (C.N) said on Wednesday they had agreed to sell certified emission reduction (CER) credits after the Israeli company acquired new technology to cut its greenhouse gases.
The agreement will increase Haifa Chemicals' revenue 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 (CDM), which allows rich countries to trade CERs from developing countries to meet targets for cutting greenhouse gas emissions.
Environmental technologies bought from the UK's Johnson Matthey (JMAT.L) will earn the maker of fertilisers and food additives some 2.5 million CERs, which it plans to sell to factories that fail to meet their emissions quotas.
The deal is one of the largest signed by Citi in Israel, said Neil Corney, the bank's managing director in Israel.
Citi's extensive experience with international corporations in the area of CER credit makes it a natural partner for Israeli companies looking to explore the possibility of entering into projects such as emission reductions, he said.
Haifa Chemicals Chief Executive Nadav Shachar said his company had set for itself a strategic target for reducing greenhouse gases.
Under the CDM, which was established under the Kyoto Protocol, each CER represents a tonne of carbon dioxide-equivalent saved from being emitted and currently trades for around 12.79 euros on the European Climate Exchange.
We all share the responsibility for the future of planet Earth and I hope that more companies and other production facilities will follow Haifa Chemicals' path and join this global effort, Shachar said in the statement. (Reporting by Joseph Nasr, Editing by Sharon Lindores)