The operation was a complete success; the patient died. Who thought we’d see a need for that joke again in relation to the EU, so soon after Cyprus? This time it’s the carbon emissions trading scheme, or EU ETS, and the consensus is it’s been dealt a near-mortal blow by a vote in the European parliament. Read more
The European parliament’s environment committee voted in favour of a plan to allow “backloading” of carbon permits. It’s the somewhat significant vote that follows the less significant vote by another committee in January, which helped prompt a big crash in carbon markets at the time.
It’s curious that in this little corner of EU co-ordination, a little good news doesn’t even provide a brief rally; prices fell more than 20 per cent after news of the vote. Read more
The EU carbon market has been miserable for most of the past few years, with prices staggering downwards from their c.€30 levels on the scheme’s launch in 2005. But it’s become very gloomy in the past couple of weeks, with mid single digits prices falling as much as 40 per cent to a record low of €2.81 last Thursday. Read more
Royal Dutch Shell, Philips and more than a dozen other top international companies have made an urgent plea to Brussels to prop up the flailing European Union carbon market after another week of plunging prices, reports the FT. Benchmark European carbon prices fell to a record low on Wednesday, extending their losses since January to more than 50 per cent. The market briefly lifted after UN talks which ended on Sunday in Durban, South Africa, saved the Kyoto climate treaty and agreed to negotiate a new legally binding pact covering all countries. But prices fell again after Canada confirmed on Monday it would become the first country to pull out of the 1997 Kyoto pact. In a letter to José Manuel Barroso, European Commission president, the group of companies that also includes Unilever, Alstom and Tesco said the eurozone crisis meant carbon prices were likely to stay low for at least another year in the EU emissions trading system, the world’s largest carbon market. Read more
A global climate deal to extend the life of the Kyoto treaty and establish the parameters for negotiating a new pact by 2015 will provide a fresh stimulus to the world’s floundering carbon markets, according to bankers and analysts, reports the FT. Carbon prices have plunged to record lows in recent weeks as Europe’s emissions trading scheme, the world’s largest, has been hit by eurozone uncertainties and fears of an oversupply of carbon credits. Other carbon market analysts welcomed the salvaging of the Kyoto treaty, noting that some countries in Durban had threatened to try to kill off the carbon offset market created under the treaty if the conference rejected its extension. Negotiators agreed to new market mechanisms to put a price on carbon, though many details were left undecided, and it is far from certain the agreement to agree will amount to anything, explains the Guardian. Read more
Barclays faces an €82m ($110m) lawsuit in London for allegedly misusing confidential information from a potential client to seal the 2010 takeover of a Swedish carbon trading company, reports the FT. CF Partners, a UK advisory and trading firm, claims it came to Barclays in September 2008 to explore whether the British bank could provide financing for a potential deal with Tricorona, a Stockholm company that had a vast portfolio of carbon credits in the niche area of hydro power projects. When that transaction stalled amid a deepening global financial crisis, Barclays used CF’s work on the value of Tricorona’s credits in pursuing its own deal with the Swedish company nearly two years later, CF alleges in a lawsuit filed in the High Court last month. Barclays said the case was “without merit” and would be contested “vigorously” by the bank.
The US, backed by Saudi Arabia, is refusing to sign off on a flagship global climate fund, the FT reports, days ahead of an important UN climate summit. The fund is one of the few measures to emerge from seven years of talks on how countries should share the burden of cutting greenhouse gas emissions, which risk raising global temperatures to dangerous levels. At the same time, the price of carbon permits in the European Union, whose members are virtually the only wealthy countries willing to offer conditional backing for a new phase of the Kyoto pact in Durban, crashed to record lows of €7.80 on Thursday, — in part due to eurozone debt crisis, but a UBS report claiming the schem was not working also unnerved investors. Read more
As with UBS, there’s more than meets the eye to this Tuesday trading update from Deutsche Bank.
And we’re not talking about the missed €10bn pre-tax profit target (that’s no surprise) or another round of redundancies (again no surprise). Read more
wailing and gnashing of teeth name-calling and politicking Australia’s minority government on Sunday announced details of its carbon pricing scheme.
Planned for a mid-2012 start, the scheme would initially price CO2 emissions at $23 per tonne, rising 2.5 per cent a year for the first three years, before moving to a market mechanism. It would apply to the top 500 polluters, excluding the agriculture sector and light vehicles. Read more
Last month Europe’s carbon trading industry was rocked by a series of cyber thefts — including the stealing of €10m worth of European Union emissions allowances (EUAs), which took place in Prague. Daniel Butler, a broker for a Czech-based carbon trader, was instrumental in breaking the story. Here, Butler gives his view of the nascent carbon trading industry.
In what is believed to have been the worst cyber attack on a national carbon permit registry yet, allowances worth about €7m were swiped from an account in the Czech Republic on Wednesday, the FT reports. The European Commission reacted by suspending trading for at least a week, or possibly longer. The extent of the delay will depend, in part, on how long it takes the Commission and EU member states, which control the registries, to agree security fixes. The suspension comes after the recent disclosure of abuse in Germany, where the scheme was exploited to avoid value-added taxes and news of a mishap in Hungary, in which used allowances were reissued. Even if trading resumes quickly, the episode is likely to undermine further a system that has long struggled to live up to policymakers’ visions. Read more
From John Parsons, a senior lecturer at the MIT Sloan School of Management who is presenting at the CFA Institute 2010 Annual Conference, which begins on Sunday in Boston…
Earlier this year, the US Securities and Exchange Commission issued guidance on disclosure requirements pertaining to climate change and greenhouse gas emissions. Although a comprehensive system for regulating greenhouse gases has not yet passed the Congress, the SEC advised companies to “evaluate the potential impact of pending legislation and regulation related to this topic.” “A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.” Read more
Carbon prices plunged on Monday after the Copenhagen conference on climate change, dealing a blow to the credibility of the EU’s carbon-trading scheme. Prices for carbon permits for December 2010 delivery, the benchmark contract for pricing European permits, dropped nearly 10% in early trading, before recovering to end the day 8.3% lower at €12.41. One dealer described the market as “a falling knife” but said that a rise in European gas prices had helped to support the carbon market. Read more