CARBON IN THE NEWS
WEEK 8 2012
March EU CO2 Option Price Quadruples in Week as Futures Jump
The March 2012 European Union carbon-dioxide permit call option with a 10-euro ($13.19) a metric ton strike price has quadrupled in a week as futures contracts jumped. The price of the March 2012 option surged to 55 euro cents a ton on Feb. 17, according to Bloomberg options data from the ICE Futures Europe exchange in London, the world’s biggest for carbon trading. That’s more than four times the record low of 13 cents a ton reached Feb. 13. There were 500,000 tons traded on that day, ICE data show. Some traders may have been seeking protection against price rises as carbon jumped 17 percent last week, the most since May 2006. Carbon is rising on speculation that EU regulators will step into the market to at least temporarily limit supply. Call options give the buyer the right to purchase at a set level. Put options give the buyer the right to sell at a certain price. To read this article in full click here
Deputy director of the Ministry of Transport's Environment Department Tran Anh Duong revealed the action plan at a workshop jointly hosted by the ministry and the British embassy in Ha Noi last Friday. The ministry will co-ordinate work to inspect and control emissions from motor vehicles, develop mass transit public transport in urban areas and supervise the implementation of the Law on Economical and Efficient Use of Energy in the transport sector. Also during this period, the application of low-carbon technologies and renewable energies will be adopted in a pilot programme. A number of relevant projects have included using bio-diesel in Viet Nam's railway sector and experiments using solar and wind power in conjunction with diesel generators at railway stations. To further understand the effects of climate change, a series of projects will examine the impact of greenhouse gases on roads, railways, land, waterways, maritime areas, infrastructure development and transport. To read this article in full click here
EU to fine car producers for polluting vehicles
The EU's environmental arm, the European Environment Agency (EEA), has said that several car makers will need to ensure their fleets are more carbon-efficient, in order to meet 2012 carbon dioxide emissions targets. The agency said in a statement that 17.5 percent of overall greenhouse gas emissions in Europe are caused by road transport, with overall emissions having increased by 23 percent between 1990 and 2009. New mandatory limits on carbon dioxide emissions were introduced by EU legislation for car-makers, with progressive fines for those who do not comply. The International Business Times wrote that the penalties would mean Bugatti could face a charge of €40,000 per vehicle. Bentley meanwhile could be charged €20,000 in penalties. To read this article in full click here
Investors blink as Abbott swears to turn back the credits
Ninety business days to go before the carbon price legislation goes live.
Eighteen weeks before the 500 largest polluters have to begin to pay for the right to emit carbon pollution into the atmosphere. A little over four months before a carbon price moves from remote possibility to legal fact. And yet corporate Australia still seems reluctant to fully engage with the changes to the commercial landscape. Undoubtedly the political landscape has a lot to do with it. The phony war between the Prime Minister and her predecessor seems to be escalating to the very real prospect of a challenge and a ballot. The relative confidence that the Gillard government would go the full term to late-2013 is being overtaken by new fears that an election will be called sooner rather than later, perhaps even as early as mid-year. And it seems unlikely in such a timeframe that Labor can claw back sufficient ground with the electorate to retain office. To read this article in full click here
Russia could block airlines from emission trading
Russia may prohibit its airlines from carbon emission trading in protest against a European Union law it says is unfair, state carrier Aeroflot (AFLT.MM) said on Monday. A group of nations will gather in Moscow this week to debate possible retaliation to the law, which raises the risk of a trade war by forcing all airlines to pay for their carbon emissions. "The Russian government is now reviewing a bill prohibiting Russian airlines to participate in emission trading: it means considering a retaliatory approach," Aeroflot told Reuters on the eve of the talks. "We are facing a new initiative by the EU that may trigger real 'trade wars' and cause damage to the world airline industry at one of its most critical stages," the airline added. To read this article in full click here
EU carbon tax penalises Gulf airlines: expert
Leading aviation expert Georges Hannouche has strongly opposed the “unilateral” imposition of the new carbon tax- Emissions Trading Scheme (ETS) by the European Union on flights into and out of Europe. He said that it was nothing short of “penalising” the Arabian Gulf carriers despite having a young and fuel-efficient fleet. “Many people in our region believe, and it’s my personal opinion as well, that our airlines have invested millions in a young and fuel efficient fleet but are still being penalised. We should strongly oppose such unilateral initiatives,” he said during a presentation on Green Airports on the opening day of the Green Aviation and Logistics Conference at the Dusit Thani Hotel in Dubai recently. Hannouche, who is the CEO of Bayanat Airports Engineering and Supplies, said the Gulf airlines will start charging passengers additional fees as early as March 1. Etihad Airways will increase the fuel surcharge by Dh11 ($3) per passenger and $0.03 per kg for cargo shipments. The increase will take effect from March 1, the statement said. Emirates estimates that over €40 million in 2012 and well over half a billion euros in the nine-year period to 2020 will have to be passed on to its customers. About a quarter of Emirates' global operations are in Europe. “Additional costs per passenger are estimated at €1.50 – €3.50. Whether this can be passed on to the customers depends upon the competitive position of the airlines,” Hannouche said. To read this article in full click here
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