Tag Archives: alternative
E.U.’s Carbon Trading System Remains In Peril, But A Rescue Attempt Is Launched
Jeremy Lovell, E&E Europe correspondent ClimateWire: Wednesday, May 8, 2013 LONDON — The European Union’s carbon emissions trading system has literally been brought low by a combination of politics and economics, but with some controversial alterations it can remain a major tool in the bloc’s battle against climate change, analysts believe. Yesterday, E.U. politicians announced a rescue attempt, but it will be a difficult process due to a mixture of poor initial design, Europe’s lingering recession and electoral politics. The market’s problem began with an oversupply of emissions allowances due to high emission caps and the recession that slashed industrial activity to the point where earlier this year the carbon dropped to a record low of €2.8 ($3.66) per metric ton. Last month the European Parliament rejected a proposed cure: to delay for five years the issuance of 900 million metric tons of carbon permits initially supposed to come to market between 2013 and 2015. The Parliament’s wafer-thin majority decision to send the so-called backloading proposal back for further consideration prompted a renewed price decline and much speculation that it was the death knell of the trading system that has been at the heart of the European Union’s climate policy since it came into effect in 2005. Experts say that for it to attract major investment in low-carbon technologies, the price of carbon must be at least €30 a metric ton — around 10 times the current level. “The implications of the vote are quite significant. It won’t kill the scheme altogether, but it will make it completely inefficient and useless, which is more or less the same thing,” said Benny Peiser of the climate skeptic Global Warming Policy Foundation. Others have less funereal, but not terribly sanguine, views. “While there remains the possibility that the proposal may come back to plenary for a new vote before summer, it remains unlikely that backloading will ever be implemented,” said analyst Haege Fjellheim at Thomson Reuters Point Carbon, which cut its 2013 carbon price forecast by 45 percent to an average of €3 a metric ton. Help is on the way, E.U. ministers say Yesterday, the European Parliament’s environment committee announced that it would vote again next month on backloading and that the full Parliament would vote again in July. At the same time, energy and environment ministers from nine of the European Union’s 27 members — including France, Germany and the United Kingdom — declared a timetable for action to rescue the trading system. They called for E.U. member states — deeply divided on the issue — to make up their minds and for the E.U. Parliament to take a new vote by July at the latest. They also urged the European Commission to come up with legal proposals for a structural reform of the system by the end of the year. “We are firmly committed to the E.U. Emissions Trading System as being at the heart of the E.U.’s climate change and low carbon investment policies up to and well beyond 2020,” the joint statement said. “Although we are clear that market interference should be kept to a minimum, a one-off and targeted intervention now would minimise market uncertainty and distortions and also promote investment in low carbon technologies,” it added. Many parliamentarians who voted against the proposal said they did so out of fear a higher carbon price would damage their domestic industries that were already struggling, while others said they did so out of the principle of free markets. For Tom Burke of influential think tank E3G, the vote was a serious setback to attempts to mend the flawed system, but not a fatal one. “This is not the death of carbon trading. That is just wishful thinking by the skeptics. It delayed action, but it is not yet defeat. There was an attempt to try to make an in-course adjustment — backloading. The reason for that is they designed a learning device with no opportunity to change when they learned,” he said. “There are deeper problems which were design flaws in the original proposal which the European Union is going to have to address. If you have any recovery in economic growth, guess what, prices will go up,” he added. Georg Zachmann of Brussels-based think tank Bruegel was also confident that the trading system would survive. “The solution is to give the system long-term credibility. We have to make market actors today believe that even in 2030 or 2040 the political framework around the allowances that they buy today doesn’t change,” he said. A German election and the need for French prestige The quest for long-term credibility is not helped by the fact that the German government is deeply divided on backloading and likely to remain so at least until after elections in late September — with the components of the resulting coalition set to determine the issue. Although Chancellor Angela Merkel’s CDU/CSU coalition is likely to again emerge as the dominant force, it is far from clear whether it will form a government with current partner the liberal FDP — which opposes backloading — or the greens who support it. Further complicating the picture is the fact that the current European Parliament is in its last year before elections in 2014, and positions have steadily become entrenched — although the International Emissions Trading Association says newly elected members tend to be enthusiastically pro-European Union initially, which might augur well for the future salvage of the trading system. But the climate and carbon turmoil in the European Union is not just an internal problem; the trading system is by far the biggest and best established in the world and is closely watched by other countries either trying or thinking about establishing one of their own. Against this backdrop, international climate change negotiations are making scant progress despite confirmation from the International Energy Agency that the world’s energy systems have made almost no progress overall in decarbonizing, with average emissions 2.37 metric tons of carbon dioxide per metric ton of oil equivalent in 2010 compared with 2.39 in 1990. This fact prompted IEA chief Maria Van der Hoeven to accuse governments last month of “20 years of listlessness” at the same time that it was reported by the Mauna Loa Observatory in Hawaii that atmospheric concentrations of CO2 were heading rapidly to and past 400 parts per million. But for E3G’s Burke, hope lies in the 2015 deadline set by the international climate negotiations for agreement on a new climate pact, with that crunch meeting to be held in Paris. “France will want Europe to have a 2030 carbon emissions target by then. They will want to make it a platform for [President Francois] Hollande. It is all about French prestige. One reason why the price has fallen so low is the absence of a 2030 target. You need one to drive prices. People buy forward. There is no substitute for a 2030 target,” he said. Continue reading
Carbon Friendly Reports Financial Projections
VANCOUVER, British Columbia–(BUSINESS WIRE)–May 08, 2013– Carbon Friendly Solutions Inc. (CNSX: CFQ) (the “Company” or “Carbon Friendly”) is pleased to report that it has accomplished the following goals in the previous six months: — Signed a binding Letter of Intent (LOI) to build the first MicroCoal™ plant in Asia, to be located in Indonesia; — Acquired 100% ownership of the MicroCoal technology; — Completed and submitted additional patent applications for exposing solid material, such as coal and biomass, to microwave radiation; — Granted a trademark registration on “MicroCoal” by the US Patent and Trade Mark Office; — Entered into a consortium with a state-owned agency to apply for a funding grant to establish a European test facility; — Appointed Dr. Isaac Yaniv, a renowned scientist and founder of MicroCoal Inc., to Carbon Friendly’s Advisory Board. (He is responsible for more than 20 patents related to materials and mineral processing, including key patents on separation of contaminants from coal.); — Established representatives in key international markets to market and sell MicroCoal in Europe, Asia, North America, and Africa; — Recruited Mr. Robert Randall Johnson, a former Vice President of Operations and Chief Engineer at Massey Energy, as MicroCoal’s Senior Project Manager. (He will oversee deployment of MicroCoal plants in Indonesia and other countries.); and — Successfully completed coal testing for an Indonesian utility, and advanced the project to the Design Stage. The Company intends to work diligently with parties interested in the MicroCoal technology to secure binding agreements that generate revenue. Based on the foregoing, the Company reports that it anticipates the Operating Profit to be in the range of $4 Million to $5 Million for its June 2014 year-end. In the June 2015 year-end, the Company forecasts the Operating Profit to be between $24 Million and $25 Million, reflecting increased adoption of the MicroCoal™ technology in key international markets. The 2013 guidance represents initial capital expenditures for a MicroCoal plant in the USA, and license fees for Europe and Asia. The Company is in advanced discussion with utilities in Canada, USA, Indonesia, and Europe and expects to convert this interest into sales in 2013 and 2014. Slawek Smulewicz, CEO and Director of the Company, states: “The growing interest for the Company’s MicroCoal Technology is an indicator of the global need for a clean coal technology. As more MicroCoal plants are built, the majority of the Company’s revenue will be driven by its MicroCoal subsidiaries, resulting in strong cash flow and enabling the Company to deliver sustainable, long-term value to its shareholders.” About Carbon Friendly Solutions Inc.: Carbon Friendly Solutions Inc., through its subsidiaries, is focused on the development of energy efficiency technology, renewable energy, and reforestation projects that have the potential to generate significant revenue. MicroCoal Inc. has an internationally patented technology that is expected to improve coal-fired utilities’ economic performance by reducing input costs, improving operations and simultaneously reducing their environmental footprint. Global CO2 Reduction generates Carbon Offsets from forestry projects that may be transacted through international voluntary markets. Carbiopel S.A. aggregates biomass supply and produces biomass fuel pellets for the European market, including large European utilities and independent renewable energy providers, in line with EU renewable energy directives. On behalf of the Board of Directors Carbon Friendly Solutions Inc. “Slawek Smulewicz” CEO and Director Forward Looking Statement Certain information set forth in this press release contains “forward-looking statements” and “forward-looking information” under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements, which include management’s assessment of future plans and operations and are based on current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as “estimates”, “expects” “anticipates”, “believes”, “projects”, “plans”, “outlook”, “capacity” and similar exp ressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause the Company’s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: risks that the actual production or sales for the 2013 or 2014 fiscal years will be less than projected production or sales for these periods; risks that the prices for MicroCoal facilities and Biomass will be less than projected or expected; technical problems; the effects of competition and pricing pressures in the Biomass and MicroCoal markets; the oversupply of, or lack of demand for, coal or biomass; inability of management to secure sales or third party purchase contracts; currency and interest rate fluctuations; various events which could disrupt operations, engineering, and sales, construction, including labour stoppages and severe weather conditions; and management’s ability to anticipate and manage the foregoing factors and risks. The forward-looking statements and information contained in this press release are based on certain assumptions regarding, among other things, future prices for MicroCoal and Biomass; future currency and exchange rates; the Company’s ability to generate sufficient cash flow from operations and access capital markets to meet its future obligations; the regulatory framework representing royalties, taxes and environmental matters where the Company conducts business; coal consumption levels; and the Company’s ability to retain qualified staff and equipment in a cost-efficient manner to meet its demand. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The reader is cautioned not to place undue reliance on forward-looking statements. The Company does not undertake to update any of the forward-looking statements contained in this press release unless required by law. The statements as to the Company’s capacity to achieve revenue are no assurance that it will achieve these levels of revenue or that it will be able to achieve these sales levels. Neither CNSX nor its Regulation Services Provider (as that term is defined in the policies of the CNSX) accepts responsibility for the adequacy or accuracy of the release. We seek safe harbor. Please contact: Slawek Smulewicz CEO and Director, Carbon Friendly Solutions Inc. Telephone: (604) 676 9792 E-mail: info@carbonfriendly.com CONTACT: Carbon Friendly Solutions Inc. Slawek Smulewicz CEO and Director 604-676-9792 info@carbonfriendly.com SOURCE: Carbon Friendly Solutions Inc. Copyright Business Wire 2013 Continue reading
United States: Can California Cap And Trade If Brussels Stumbles?
08 May 2013 Article by Jeffrey Rector Last week, the European Parliament rejected a proposal to reduce the quantity of greenhouse gas (GHG) emissions allowances in order to fix a supply-demand imbalance in the European Union Emissions Trading System (EU ETS). Some view this as the beginning of the end of the European Union’s ten-year carbon cap-and-trade experiment. A high profile failure of the EU ETS is likely to provide ammunition to critics California’s cap-and-trade program. An emissions offset or emissions allowance (representing the right to emit one metric ton of CO 2 or GHG equivalent, or CO 2 e) within EU ETS is no longer trading at values that promote investment in low carbon technologies, and therefore the EU ETS is not presently serving its core purpose. The trading value of an EU Emissions Allowance was above €30 per metric ton in 2008 before the sharp impacts of the global recession. Prices halved in late 2008 and early 2009 and hovered around €15 for two years until 2011. Then prices began a steady decline to €10, then €5, and now even less. It is understood by energy and climate economists that if emissions allowances can be purchased for less than €10, a cap-and-trade system will have little if any effect on the pollution abatement decisions of heavy emitters because the allowances would be cheaper than virtually all known or developable emissions abatement technologies. Indeed, such rock bottom prices may have the effect of promoting high-emitting technologies that should be discouraged. At issue is an oversupply of credits: (i) the EU was too generous in its granting of free allowances; (ii) international offsets from the tradable credit programs under the United Nations Framework Convention on Climate Change (including the Clean Development Mechanism) outstripped demand; and (iii) the global recession reduced the demand for energy and thereby the demand for credits, which drives pricing. The EU Parliament recently voted whether to defer the issuance of a portion of new emissions allowances (referred to as “backloading”) in order to constrain supply and raise prices. When the final votes were tallied, the backloading proposal was rejected by a narrow margin. It is said that carbon markets viewed the outcome as a vote of no-confidence in the future viability of the EU ETS, which had pushed the trading price of allowances to the current price of less than €3 per metric ton. The backloading proposal will likely be reconsidered by the EU Parliament early this summer, but its prospects are uncertain. While it is impossible to reduce the basis for opposing backloading to a single idea, it seems that, even in Europe, there is almost irresistible pressure to give economic growth precedence over reducing emissions; and it appears that Europe, much like the United States, is still struggling with the question of whether the two objectives (economic growth and emissions reduction) can be simultaneously advanced. For at least two reasons, the European experience does not bode well for California’s fledgling carbon market. First, it demonstrates the difficulty of creating a market in tradable rights to undertake a previously unregulated activity. The cost of emitting greenhouse gasses has heretofore gone unaccounted for and been externalized. A cap-and-trade system creates scarcity in the right to emit and allocates those rights for free or fee to regulated entities. While cap-and-trade may be a “market-based” solution, the allocation of emissions allowances is, in fact, a political decision that produces winners and losers. Thus, the true test for the political viability of a cap-and-trade system is when the emissions allowances are no longer given away; the EU ETS was beginning to enter this phase, and the strength of the opposition from the heavy emitters predictably increased. The California Legislature has delegated the difficult political decision of allocation to the California Air Resources Board, which partially insulates the allocation decision from political pressure; however, the scope of the delegation to CARB arguably undermines the legitimacy, and possibly the legality, of CARB’s cap-and-trade decisions. Second, the California Legislature viewed it to be in California’s best interest to be a leader in regulating carbon (and in policy circles, a leader in cap-and-trade) on the assumption that other states and the federal government would follow. A high profile failure of carbon cap-and-trade across the Atlantic would be a setback for the prospects of a national policy being implemented in the near future, and the cost of leading when there are no followers might not be one the majority of Californians will be willing to pay. Parties interested in the fate of California’s cap-and-trade system will likely be following this developing story in Europe and waiting for another EU vote, which is expected to come early this summer. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific Questions relating to this article should be addressed directly to the author. Continue reading
