The UN Environment Programme (UNEP) has reportedly revised downward the number of certified emission reductions (CERs) it expects to be issued by UN-approved carbon reduction projects in the coming years, prompting analysts to predict that the price of carbon credits within the Clean Development Mechanism (CDM) is likely to rise.

According to reports, UNEP said it now expects 1.48 billion CERs to be issued by approved carbon reduction projects in the period to 2012, down from its previous estimate of 1.51 billion.

The move is the latest in a series of downward revisions as a result of bottlenecks in the project approval process that have led to delays in the issuing of credits.

Henrik Hasselknippe, director of emissions trading analysis at analyst Point Carbon, said that while UNEP was seeking to ease the bottlenecks through the appointment of more project approval staff, an increase in the number of projects applying to enter the CDM and recent attempts to tighten the approval process meant that delays were still occurring.

"UNEP has been reducing supply projections for some time," he said. "Fewer credits being issued means you will have more people fighting over the same projects and that will cause prices to rise."

He added that with the estimated supply of CERs still far exceeding the number that can be imported into Europe's emissions trading scheme (ETS) any delays should not directly affect the price of EU Allowances (EUAs) within the European scheme. However, he admitted that the downgraded UN estimates were adding to the sentiment that prices for both EUAs and CERs will rise in the run-up to 2012.

Repeated studies have estimated that the price of carbon credits within the EU ETS will average between €38 (£31) and €45 per tonne over the 2008 to 2012 period, representing a significant increase on the current market price of about €25 a tonne.

The news comes just days after the Carbon Market and Investors Association expressed official concern at the bottlenecks in the CDM approval process.

In a submission at the UN's climate change talks in Ghana, the trade group said that delays in approving legitimate carbon reduction projects were resulting in "losses with regards to both opportunity costs and real costs to CDM project developers".

It recommended that the UN should increase staffing levels at the office tasked with checking and processing applications. "A process that can take three meetings, delaying a project by four [to] five months, could be expedited if a full-time [member of] staff were available to consider project issues more frequently," said the association.

However, Hassleknippe insisted that good progress had already been made in streamlining the approval process and that the delays were being addressed. " The CDM approval procedures are the most detailed and robust we have for any carbon reduction projects," he said. "There are always areas that can be improved, but we shouldn't forget that this market is still very young and it is getting better all the time."