EIB is ready to monetise phase three allowances
- Category: Emissions trading
Even though the EIB declares that it does not take any view on EUA’s prices and does not have a price target for the monetisation of the EUAs and the main objective of the monetisation is to minimise any impact on the EUA market it will turn out soon what will be the effects of the whole process on the carbon market.
The Polish NAP corrected ex post
- Category: Emissions trading
The allocations for some Polish installations for 2012 will be decreased and set aside for the reserve pursuant to the new draft Law. For additional allowances may count the installations which were subject to change.
The criteria for the granting carbon dioxide transport projects the PCI status pursuant to the new draft Regulation on guidelines for trans-European energy infrastructure
- Category: CCS
The cross-border carbon dioxide network can get the project of common interest status, which, in turn, enables the significant streamlining of the investment.
The Draft Report of 28 October 2011 on a Roadmap for moving to a competitive low carbon economy in 2050 – the potential breakthrough in European climate policies?
- Category: Implementation
With respect to the Emissions Trading System the Draft Report ‘acknowledges that the carbon price is very much lower than was originally envisaged and is failing to provide the necessary investment stimulus’, and proposes to recalibrate the ETS before the commencement of the third phase by setting aside allowances to restore scarcity.
The Draft Report presents also some other quite revolutionary theses, notably the modification of 1.74% annual linear reduction factor, the reserve price for the auction of allowances, reducing greenhouse gas emissions from agriculture, time limits for new sources of electricity generation emitting more than 100g CO2/kWh and border adjustment measures requiring importers of products in carbon leakage sectors to purchase allowances – all of them of potential fundamental impact on European industries.
The European Economic and Social Committee’s opinion does not touch the most controversial points of the new energy efficiency draft Directive
- Category: Energy efficiency
The schedule for further procedure as regards new energy efficiency Directive is following:
24/11/2011 Council: debate or examination expected,
24/01/2012 EP: report scheduled for adoption in committee, 1st or single reading,
17/04/2012 EP plenary sitting (indicative date).
The EESC opinion issued on 26 October 2011 doesn’t, however, positively feed into the resolution of the main dilemmas undermining the initiative concerned.
Preparations for California cap-and-trade auctions
- Category: Emissions trading
The objective of the requests for proposals currently released by the Air Resources Board in California is to administer financial and transaction services to support up to six quarterly GHG allowance auctions and up to six “reserve sales” to implement the California cap-and-trade program. ARB is anticipating the first California allowance auction will take place in late 2012. The auctions will continue based on the calendar quarter for the remainder of the program.
The deadline for receipt of proposals is December 2, 2011.
Emission allowances position limits – transatlantic approach common in principle but methods of realisation different
- Category: Emissions trading
The Californian Final Regulation Order belongs to legal measures regulating cap-and-trade schemes that apply the concept of strict ex ante holding limits as regards the volumes of allowances, the entity is eligible to possess.
Section 95920 of the Final Regulation Order defines the holding limit as the maximum number of California GHG allowances that may be held by an entity or jointly held by a group of entities with a direct or indirect corporate association at any point in time.
The said approach is quite unique taking into account the mechanisms of the European Union Emissions Trading Scheme. The review of the oversight measures of the EU ETS is underway effecting these days in adopting by the European Commission the view that emission allowances should be considered financial instrument and all infrastructure of the financial market should generally apply thereto (with some exceptions – see: “MIFID II and emissions – consequences under preliminary investigation”).
Taking into account in this context the newly announced MiFID II and MiFIR Proposals it is apparent that the different regulatory measure has been considered appropriate in that regard i.e. position limits taken, however, on an individual basis and applied ex post.
The issue is quite fundamental when it comes to commercial strategies on the carbon market. It seems that emissions market participants have legitimate interests to be able to be confident in the rules that could have an impact on the possibility to execute previously agreed transactions, and not to be surprised by the sudden regulatory measures introducing, hypothetically, a ban on certain types of transactions or on certain counterparties.
Consequences of the new MAD Regulation regime for inside information for the emission allowances market – the threshold decisive
- Category: Emissions trading
It becomes evident now which participants of the emissions trading infrastructure are systemically important for carbon markets – and these findings will gain the rank of the regulatory text. This pivotal position of only certain installations will not give them any special privileges – but rather burdensome obligations and strict responsibility.
MIFID II and emissions – consequences under preliminary investigation
- Category: Emissions trading
Currently, MiFID does not apply to the secondary trading of spot emission allowances.
What are the pivotal elements of the Commissions proposal on MiFID II as regards emissions? The issue of reclassification of emission allowances as financial instruments was extensively covered by media but is this really the case that capturing spot emissions trading by financial market legal infrastructure effects in entirely win-win situation for everybody? No, it isn’t and the Commission itself admits so in accompanying documents to the MiFID II/MiFIR proposals.
Carry-over of AAUs surplus, LULUCF mechanisms and maket-based instruments - conclusions of the Environment Council of 10 October 2011 for the Durban Conference
- Category: Legal Alert
Bearing in mind the issues of the AAUs carry-over, the LULUCF, offset credits and other flexible mechanisms are currently the “hot topics” and are burdened with far-reaching economical consequences, let’s see what expressions in that regard the environment ministers were able to agree in the official document adopted at the last meeting.
Discrepancies in views on the finality of transfers in emission trading among EU ETS and California cap-and-trade regulators
- Category: Emissions trading
Final Regulation Order, version of October 2011 on California cap on greenhouse gas emissions and market-based compliance mechanisms has been currently posted on the website of the Californian Air Resources Board, together with accompanying documentation, among others, four Compliance Offsets Protocols.
Considering the potential participation in both GHG compliance programs: the European Union Emissions Trading Scheme and its Californian counterpart, it is noteworthy that the registry rules provided for in the Californian scheme are founded on the fundamentally different principle in the practical and legal functioning as regards the finality of transfers.
The schedule and key parameters for the monetisation of CO2 allowances from NER 300 reserve specified by the EIB
- Category: Legal Alert
It is very likely that the events as regards monetisation of allowances by the EIB will run now quickly. If the legislative process relative to EU ETS registry rules is completed (as declared) in the first half of November 2011, the start of the sale of the first tranche of 20 million allowances could be in December. The consequent 9 monthly tranches of 20 million EUA’s will in that event follow from January 2012 till September 2012.
Furthermore, assuming that, as the EIB indicated, the sale of the remaining 100 million allowances should be completed before 2013 and started immediately after the conclusion of the sale of the first 200 million allowances, it would fall for each month in the last quarter of 2012 approximately 33 million of EUAs for disposal.