Value of emissions credits under NOx program doubles EPA expectations.

Pulp and paper companies hold assets unexpectedly worth between US$ 66 million and US$ 106 million annually in the form of NOx emissions credits, says a recent study performed by Evolution Markets LLC, New York, New York, USA. The emissions-credit advising and brokerage firm explains the value of each NOx credit, as determined by the first purchase of such credits completed under the Environmental Protection Agency (EPA) NOx SIP Call, is double what had been predicted initially by the EPA

The study calculated the value of NOx credits allocated annually by the EPA to the 131 pulp and paper companies covered under the EPA's NOx SIP Call Rule and Section 126 NOx budget program. When first introduced, the EPA had originally estimated the value per credit between US$ 2000 and US$ 2500 for the program. The first trades of NOx emissions credits under the expanded NOx SIP Call valued the credits at between US$ 3500 and US$ 5500.

According to the study, the average pulp and paper company's NOx allocations are valued at between US$ 517,000 and US$ 813,000 annually. Since the pulp and paper industry" received a less stringent emissions-reduction goal than the electric generation sector, which is also under the NOx program, there is a built-in incentive for pulp and paper facilities to "over control" and sell their NOx credits.