Umbrella Carbon Fund

The first tranche was intended for purchasing greenhouse gas emission reductions from two Chinese companies. The make-up of the UCF was announced by the World Bank after the two projects involved were approved as Kyoto-compliant projects by the Executive Board of the Kyoto Protocol’s Clean Development Mechanism. Their goal was to cap the emissions of HFC-23 (trifluoromethane), one of the most potent greenhouse gases responsible for climate change through global warming. HFC-23 has a global warming potential that is 11,700 times that of carbon dioxide.

In January 2011, the World Bank announced that Tranche 2 of its Umbrella Carbon Facility (UCF) had become operational. This tranche provided the opportunity for existing carbon projects to continue selling their carbon credits well beyond 2012. The second tranche was developed to complement other carbon funds as it intended to purchase carbon credits far beyond the end of the Kyoto Protocol’s first commitment period, thus offering project developers longer contract periods than available in the market at the moment. It packaged together a group of small to medium size projects of varying technologies, across several countries and regions. The emission reductions from these projects represented the tail end of the first crediting period of projects already under contract with existing World Bank Carbon Funds. The tranche was intended to provide post-2012 CERs to participants in the World Bank Carbon Funds.