CARBON IN THE NEWS
WEEK 1 2012
Global CO2 market totals 96 billion euros in 2011
Carbon markets across the world were valued at 96 billion euros ($122.28 billion) last year, up 4 percent on 2010, helped by a surge in trading activity as record low carbon prices stoked volatility. The value of the EU Emissions Trading System (ETS), the world's biggest carbon market, grew by 6 percent to an estimated 76 billion euros, said analysts at Thomson Reuters Point Carbon. Overall traded volume in so-called EU Allowances (EUAs), including options and auctions, reached around 6 billion last year, a 17-percent increase on 2010. "The growth in value was relatively smaller than the volume growth due to lower prices," the report said, noting the average weighted EUA price in 2011 was more than a euro below the price in 2010, due to economic concerns and a glut in permit supply.
Lufthansa Carbon Trading to Cost 130 Million Euros in 2012
Deutsche Lufthansa AG, Europe’s second-biggest airline, said European Union emissions-trading expenses will add 130 million euros ($168 million) to costs in 2012, prompting the carrier to raise ticket prices. Spending that results from the EU’s carbon-emissions cap- and-trade program, which start for airlines this year, will be taken into account when Lufthansa calculates fuel surcharges, the Cologne, Germany-based company said today in a statement. The trading program “burdens European airlines with yet another cost which makes flying in and over Europe more expensive for passengers,” Carsten Spohr, head of the company's German airlines division, said in the statement. The EU decided in 2008 to include aviation in the project after the industry's greenhouse-gas emissions in the region doubled over two decades. Germany has allocated 3 billion euros of free carbon permits until 2020 to airlines operating in the country, and the carriers have to pay extra for their needs beyond that. To read this article in full click here
Ryanair announces 21p per flight EU carbon trading levy
Ryanair yesterday announced it would become the first airline to highlight the cost of compliance with the EU's emissions trading scheme (ETS) by introducing a €0.25 per passenger levy on all bookings made from next Tuesday. The company predicted purchasing EU carbon allowances to cover its greenhouse gas emissions will cost between €15m and €20m this year and as a result argues that the new levy is necessary to cover the cost of what it describes as "the EU's new eco-looney tax". Ryanair's Stephen McNamara reiterated the company's opposition to aviation's inclusion in the EU ETS, which came into effect from the start of the year. "Ryanair does not believe that European aviation should be included in the ETS scheme since it accounts for less than two per cent of the EU's CO2 emissions," he said in a statement. "This latest EU stealth tax will damage traffic, tourism, European competiveness and jobs at a time when no other economic block is including aviation in their ETS schemes. To read this article in full click here
US carbon trading "to reach $782m" in 2012
Analysts expect the volume of carbon trading in the US to double this year in line with the emergence of a new market across the five states and Canadian provinces that make up the Western Climate Initiative (WCI). Thomson Reuters Point Carbon said that while a national trading scheme is not on the agenda due to the US presidential elections in November, it predicts substantial growth in the regional markets. It estimates the WCI will overtake the Regional Greenhouse Gas Initiative (RGGI), an agreement between nine north-eastern states to reduce CO2 emissions from the power sector by 10 per cent by 2018, to become the biggest North American carbon market in value terms. WCI members are considering implementing a cap-and-trade programme to reduce their emissions, with California bringing power generation and large industrial facilities into the scheme from 2013, before adding emissions from the combustion of fuels, including transportation fuels, in 2015. In the lead up to the full launch of the scheme, Point Carbon forecasts 24 million metric tons (Mt) of allowances for 2013 will be distributed in early auctions in California and Quebec later this year. While the remainder of the 180 million ton cap is expected to be either auctioned next year or distributed for free, the transactions are expected to dominate the market, swelling it tenfold year-on-year to $392m. To read this article in full click here
Chinese regions prepare for carbon trading as state mulls coal cap
Seven Chinese cities and provinces have been ordered to cut emissions in preparation for the country's pilot carbon markets. A note issued today by China's state planning agency, the National Development and Reform Commission, demands the cities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen, and provinces of Hubei and Guangdong, set "overall emissions control targets". The provinces and cities must also submit proposals explaining how these targets will be allocated, establish a dedicated fund to support the nascent market and draw up detailed implementation plans, news agency Reuters said. Guangdong province, the country's largest CO2 emitter, is ahead of the curve in that its plans have already been approved by the country's cabinet. The south-eastern province has committed to increase the share of non-fossil fuels to 20 per cent of total energy consumption by 2015 and cut its carbon intensity – a measure of CO2 emitted per unit of GDP – by 19.5 per cent. To read this article in full click here
Ryanair Passes on Carbon Tax to Passengers
For European travelers, as well as their cousins who cross the ponds for an extended holiday, Ryanair is the ticket to exploring 160 cities throughout the continent, Britain and its base in Ireland. What started off as a puddle jumper connecting Gatwick to Waterford is now a giant that operates 1400 flights a day. Flying Ryanair makes traveling with an American legacy airlines feel like an Air Force One experience, but the 73.5 million passengers who flew on the company’s fleet speak volumes about the company’s success. Notoriety is certainly part of Ryanair’s business model. Synthetic leather seats, no seat back pockets, dodgy customer service, penalizing passengers for not printing their boarding passes before arriving at the airport and cheeky threats to charge for lavatory use are all part of the Ryanair schtick. Now Ryanair is passing on the cost of the European Union’s aviation carbon tax. To read this article in full click here
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