CARBON IN THE NEWS
WEEK 7 2012
Set-aside could double EUA prices by 2014
Withdrawing carbon permits from the EU Emissions Trading Scheme could cause European carbon prices
to double by the end of next year, a poll of analysts showed Wednesday. European Parliamentarians are
mulling a proposal to support carbon prices near record lows by withdrawing supply of up to 1.4 billion
allowances from the EU scheme, a move aimed at displacing the market’s current surplus. Withdrawing
the full 1.4 billion permits from the bloc’s phase three (2013-2020) auction quotas could cause front-year
EU Allowances to soar to 17.60 euros by the end of 2013, more than double the current price of 8.25
euros, the poll found. Setting aside 500-800 million EUAs, a range floated by the EU Commission early
last year in an unpublished draft of its 2050 low-carbon roadmap, would have a markedly smaller e
In this scenario 2013 year-end prices would be, on average, between 13.50 and 14.90 euros, depending on
the exact volume to be plucked from the market, the six analysts predicted. Should lawmakers in the 27-
nation bloc fail to agree on a set-aside proposal, EUA prices would likely climb to 11.40 euros by the end
of next year, the poll found. To read this article in full
Airlines face CO2 bill of 300 mln euros in 2012: Barcap
The EU emissions trading scheme will cost airlines 300 million euros ($391.98 million) this year, "a drop in
the ocean" compared to the tens of billions of dollars that carriers are likely to pay for jet fuel, an analyst
at Barclays Capital said on Thursday. Airlines joined the scheme, which covers carbon emissions from
European and foreign airlines flying into and from European Union airports, on Jan. 1. Non-EU
governments have lashed out at the scheme because the cost is calculated on the emissions from the
point of origin, not just in Europe. A group of 26 countries including Russia, India, China and the United
States plan to meet in Moscow next week to discuss a plan of action, as they insist the EU scheme
breaches international law even though the EU's highest court in December ruled otherwise. Yet non-EU
airlines are expected to pay for just a quarter of the total carbon bill, around 75 million euros, this year,
said Trevor Sikorski, an analyst at Barclays Capital. Sikorski pointed out that the scheme falls harder on
European carriers than it does on non-European carriers, because European airlines have more frequent
intra-EU flights. To read this article in full
ExxonMobil fined 'record' £2.8m over carbon dioxide emissions
Energy giant ExxonMobil was fined £2.8m for failing to report carbon dioxide emissions from its
Mosmorran chemical plant in Fife, it has emerged. The Scottish Environment Protection Agency said there
had been no direct environmental impact. The fine, believed to be the biggest ever in the UK, dates to
2010 but the details have only just been published. ExxonMobil said it regretted the errors, which were
reported as soon as they were identified. In its 2008 report to Sepa the company failed to account for
33,000 tonnes of carbon dioxide from its ethylene plant in Mosmorran and Sepa issued the fine in 2010.
Details only came to light in a report published by Sepa last week. To read this article in full Banks and investors back calls to biggest companies to cut emissions
On behalf of 92 pension funds, asset managers, insurers and banks, the Carbon Disclosure Project (CDP),
which holds the world’s largest collection of self-reported corporate environmental data, has sent letters
to the CEOs of 415 of the world’s largest public companies calling for cost-e
reductions of their carbon emissions. The letters were sent as part of CDP’s Carbon Action initiative in
parallel to CDP’s annual request for disclosure of greenhouse gas emissions, climate change strategies and
water use. Support for Carbon Action, which aims to improve company profitability and reduce the longterm
business risks of carbon emissions, has more than doubled since it was launched in April 2011, driven
by a small group of institutional investors including Dutch and British pension funds and asset managers.
To read this article in full
Russia to Issue 100 Million Carbon Credits
Russia will issue 100 million carbon certificates worth 500 million euros ($650 million) in 2012,
a Sberbank executive who helps administer projects for the government said in an interview. Russia has
issued 28.6 million credits to date under the United Nations Joint Implementation mechanism, a scheme
to spread green technology in countries that have pledged to reduce greenhouse gases under the 1997
Kyoto Protocol. This includes 642,892 so-called Emission Reduction Units, or ERUs, since the start of the
year, according to calculations from data on the Russian carbon credits registry website. "We expect that
during this year something like 100 million carbon certificates will be delivered to the world market,
mostly to the EU, partially to Japan," Vsevolod Gavrilov, director for energy e
resources at Sberbank, said in an interview. "This 0.5 billion [euros] could generate 2 billion in investment,
focused on climate protection and energy e
a fee to state-owned Sberbank before the government will release credits. Russian companies have
earned ERUs for reducing wasteful flaring of gas during oil production, using energy from biomass
and upgrading furnaces to more energy-e
EU Open to Talks but Won't Scrap Carbon Tax
Europe is willing to discuss its new carbon emissions tax for airlines with disgruntled governments but has
no plans to scrap the levy, top EU o
tax is too costly and was implemented without consultation. Industry leaders are warning the
disagreement could spark a trade war between Europe and the rest of the world. "We're ready to negotiate
within our framework," Siim Kallas, European Commission vice president and transport commissioner, said
at an aviation conference in Singapore. "We aren't trying to dominate the world. "The EU imposed the tax,
known as the emissions trading scheme, on Jan. 1 in a bid to curb climate-changing gases but money will
not be collected until next year. Under the system, airlines flying to or from Europe must obtain
certificates for carbon dioxide emissions. They will get free credits to cover most flights this year but must
buy or trade for credits to cover the rest. "I'm very worried," said Tom Enders, chief executive of Airbus,
the world's largest commercial airplane maker. "What started out as a solution for the environment has
become a source of potential trade conflict." To read this article in full t: +44 (0) 20 3384 8680
www.gmouk.comfficials said Monday. Airlines and governments have complained theclick here
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