SEOUL - Shares of Ecoeye surged after becoming one of only a handful of carbon-credit developers worldwide to go public as the US$2 billion (S$2.7 billion) sector grapples with challenges to its credibility.

The South Korean company’s shares closed at 62,300 won, up 80 per cent on the Kosdaq Index of small-cap stocks. Ecoeye debuted on Nov 21 after raising 72 billion won (S$75 million) to develop further emissions-reduction projects, including distributing cooking stoves that reduce the burning of firewood in developing nations.

The carbon offsets market has been hurt by a lack of regulation and doubts over whether many projects actually deliver climate benefits. The chief executive of South Pole – the world’s top seller of offsets – stepped down in November over allegations that thee company overstated the impact of the products it sold, while energy giant Shell recently ended the world’s biggest corporate plan to develop the credits.

“Crises come and go, but the market will only grow in the long term,” Ecoeye CEO Rhee Soo-bok said in an interview before the debut. Additional scrutiny as a listed company will help the company increase transparency in the offsets market, he said.

The South Korean firm joins a small cohort of carbon developers that have gone public, including Carbon Streaming and Base Carbon in Canada and India’s EKI Energy Services. Most companies that develop and trade credits remain privately owned, as the market is still nascent and highly fragmented.

Ecoeye, set up in 2005, aims to generate about 10 million tons of credits per year, Me Rhee said. The company sold about 2.1 million shares at 34,700 won each, at the top of its marketed range. BLOOMBERG