Emissions management strategies and emission tradingand potential barrier: The faster way to satisfy EU ETScompliance requirements

摘要

Emissions Management StrategiesrnEmissions management for single plant is dependent on the complexity of the CO2rncalculations and the emissions caps imposed by the governmental or the local staternregulator. Different European countries have imposed contrasting data quality constraints.rnE.g. In the Netherlands spreadsheet cannot be used for data processing but for most otherrncountries verifiers and regulations have been less stringent.rnMulti-site emitters have a more complex scenario to manage. The ideal approach is to haverna common enterprise wide solution to capture emissions for monitoring and reportingrnpurposes and combines allocations and forecasts for the plants in a central system where arnnet position can be managed and a trading strategy implemented.rnEmissions trading and potential barriers.rnEmissions trading strategy should utilize financial market best practice and spread marketrnexposure over the year (in keeping with the annual NAP allocation) for trading a net long orrnnet short position. This will expose the firm to an average price traded value over the yearrnand not a single one off price. The larger the short or long exposure the closer the positionrnshould be actively managed by financially experienced personnel. Options, floating pricernforwards and swaps can also be used to ensure an average annual price exposure andrnminimize transaction costs. An effective and active trading strategy will help ensure marketrntrends are tracked and market timing of transactions are effective. This will result in loweringrnenvironmental costs to the firm.rnThere are few barriers to cap and trade emissions trading so long as markets evolve acrossrnEurope at the same pace. Liquidity has improved and one common market across Europernhas evolved for emissions which is more akin to financial markets like foreign exchange thanrnflow based commodity markets where there are still massive barriers to the creation of anrneffective pan European traded market.