This week’s ratification by Australia of the Kyoto Protocol has helped push the share price of one of the nation’s few environmentally focused stocks – CO2 Group Ltd.
Shares jumped almost 25 per cent in early trade on Tuesday to hit a record of 88 cents each following the move to ratify the Kyoto deal the previous day by newly elected Prime Minister Kevin Rudd.
CO2’s share price had more than doubled in November, buoyed early in the period by a big deal with Woodside Petroleum Ltd and later as the market recognised an impending Labor victory at the national poll.
Labor’s policies to ratify the Kyoto Protocol and introduce a carbon trading scheme by 2010, one year ahead of the then-government’s promise if re-elected, made CO2 a potential winner if Kevin Rudd came to power.
The policies of Labor have major ramifications for Western Australia’s big carbon emitting resources sector.
CO2 managing director Andrew Grant said these three events had been very positive for the share price, which sat at around 30 cents at the beginning of last month, before the deal with Woodside was announced on November 7.
Woodside has signed up to a carbon offset program worth as much as $100 million to offset the emissions from its Pluto liquefied natural gas project by sequestering carbon in oil mallee plantations.
With shares boosted to around 40 cents, they began to climb as the November 24 election loomed, leaping almost 25 per cent to 73 cents from 60 cents each on the first day’s trading after the poll.
Mr Grant said deals with the likes of Qantas and Woodside had sparked business interest in the company’s product at a time when the policy settings were becoming clearer.
“I think there is a lot of positive symbolism in the nature of these agreements,” he said.
“Business is now realising that it needs to take a position going forward.”
