Thursday, February 28, 2008

Carbon Trading: Today big news about registry delays

I will take some credit for getting this ball rolling. I started to
complain to journalists about the EUA Deliveries being delayed. Seems to
have struck a chord with some bigger players. I had worried that all big
players would not care since most trade forward or futures. Yesterday it
was the Czech Registry, Today Germany, the UK.

Daniel Butler

Full stories at bottom:
Subject: wt wallich- Czech Grant of 2008 Emission Permits Will Be Del

A late allocation will put eastern Europe emission traders at
a disadvantage compared with traders in western Europe, where
permits may be granted faster, said Daniel Butler, senior
consultant at Wallich & Matthes in Prague, a securities firm and
brokerage.
``Eastern Europeans usually have little access to forward
trading due to poor credit lines,'' Butler said. ``They rather
trade only spot EU allowances.''
Eastern European factories and power stations will be hurt
particularly should prices fall and they don't yet have permits to
sell, Butler said.


Subject: ``early summer''German Grant of 2008 Emission Permits Delaye

other than those with whom i've already spoke, who else is
degressed/angry by
this? comments my way. Are the regulators competent, at a time when they
are
trying to tell the world that emissions trading is the way? I'm seeking
clarification on the length of the delay.


``This market is becoming a farce because of the lack of
transparency,'' said Phil Brown, chief executive officer of Climate Spot
Exchange, a proposed bourse in London for emissions traders. ``The lack
of information is incredibly frustrating in a
multibillion-dollar market.''

``I am livid, absolutely furious about the incompetence by
regulators,'' said Gerhard Mulder, vice president of eco markets at ABN
Amro Holding NV in Amsterdam. ``The commission and most member states
disregard the rules that markets play by.''


Story 1 of 2
Czech Grant of 2008 Emission Permits Will Be Delayed (Update1)
2008-02-27 12:38 (New York)


(Adds comment in fourth paragraph, other nations in eighth.)

By Mathew Carr
Feb. 27 (Bloomberg) -- The Czech Republic will delay its
allocation of carbon dioxide permits for 2008, blaming technical
faults in the European Union system that tracks ownership of the
allowances, according to its registry.
Permits for this year are supposed to be allotted by the end
of this month, a deadline set by the European Commission, which
regulates the program. The EU emissions-trading system is the
world's biggest greenhouse-gas market.
The country's registry committee will revisit the allocation
at ``the end of April,'' according to a notice on the registry's
Web site. Registry manager Miroslav Rehor declined to specify in an
e-mail when the government would allocate permits. National, EU and
United Nations registries that track ownership of emission permits
and credits are being completed by government bodies.
A late allocation will put eastern Europe emission traders at
a disadvantage compared with traders in western Europe, where
permits may be granted faster, said Daniel Butler, senior
consultant at Wallich & Matthes in Prague, a securities firm and
brokerage.
``Eastern Europeans usually have little access to forward
trading due to poor credit lines,'' Butler said. ``They rather
trade only spot EU allowances.''
Eastern European factories and power stations will be hurt
particularly should prices fall and they don't yet have permits to
sell, Butler said.

Price Plunge

Grants of permits are being delayed this year after the
commission allowed too many permits to be awarded in the three
years through 2007, causing the price to fall as low as 2 euro
cents ($0.03) a metric ton, according to prices from the BlueNext
SA exchange in Paris. The EU is trying to prod the U.S. into
adopting emissions trading to help limit greenhouse gases blamed
for global warming.
Germany and Poland are among nations that will probably fail
to issue carbon dioxide permits to factories and power stations by
the February deadline, Point Carbon said on Feb. 20, citing a
survey of officials from member nations.
A maximum of 11 of 27 countries are likely to issue by the
deadline, Oslo-based research and publishing company Point Carbon
said at the time. They plan to allocate 614 million allowances a
year, compared with a total cap of more than 2 billion, the report
said. The U.K. has said it will issue on time.

--Editors: Amanda Jordan, Will Kennedy

To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net

--

Story 2 of 2


Germany, U.K. Delay Grants of Carbon Dioxide Permits (Update1)
2008-02-28 07:58 (New York)


(Adds U.K. delay starting in first paragraph, comment from
climate bourse CEO in fourth, banker in sixth.)

By Mathew Carr and Thom Rose
Feb. 28 (Bloomberg) -- Germany and the U.K., Europe's two
biggest emitters of carbon dioxide, delayed their allocation of
2008 carbon dioxide allowances because European Union and United
Nations ownership-tracking systems are incomplete.
``Contrary to previous plans, it currently appears that the
European Commission will probably only be able to create the
connection with the international coordination system of the
climate secretariat in early summer 2008,'' according to the Web
site of German emissions body Dehst. ``Germany is working to
speed up this process.''
The permits were supposed to be granted by the end of this
month under a deadline set by the European Commission, which
regulates the bloc's emissions trading. The climate secretariat
is the United Nations Framework Convention on Climate Change. The
lack of allocation will hamper spot trading in the EU's program,
the world's biggest greenhouse-gas trading system, during its
five-year second phase through 2012.
``This market is becoming a farce because of the lack of
transparency,'' said Phil Brown, chief executive officer of
Climate Spot Exchange, a proposed bourse in London for emissions
traders. ``The lack of information is incredibly frustrating in a
multibillion-dollar market.''

EU Allocations

The EU's 27 nations will allocate allowances equivalent to
about 2.08 billion metric tons of carbon dioxide for 2008. At
forward prices of 21.09 euros a ton, they are worth 44 billion
euros ($66 billion), according to prices from the European
Climate Exchange in London. Both Climate Spot Exchange and ECX
are units of Climate Exchange Plc, based in the Isle of Man, U.K.
``I am livid, absolutely furious about the incompetence by
regulators,'' said Gerhard Mulder, vice president of eco markets
at ABN Amro Holding NV in Amsterdam. ``The commission and most
member states disregard the rules that markets play by.''
Commission spokeswoman Barbara Helfferich didn't immediately
respond to requests for comment sent by e-mail and telephone.
Britain has delayed its allocation by an unspecified number
of weeks.
``The U.K. hopes to be able to issue carbon allowances with
minimal delay and in the meantime activity in the carbon markets
will continue to operate as normal because the bulk of EU-
allowance trading is in the secondary market using forward
contracts,'' the country's Department for Environment, Food and
Rural Affairs said today in an e-mailed statement.
Germany's Dehst said the nation's allocation plan hadn't yet
been approved by the commission.

--Editors: Kristen Schweizer, Amanda Jordan

To contact the reporters on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net;
Thom Rose in Frankfurt at +49-69-92041-127 or
trose5@bloomberg.net

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