comments my way...anyone trading the dec 2012 mar 2013 cer spread hired lawyers re this? should the EU refund any trading losses?
"Anyone affected by that certainly would have a case to
argue," Hobley said. EU regulators "should make it clearer"
precisely from when the restrictions may apply. Emitters can be
fairly certain about phase-two compliance as long as they
surrender their credits into the EU transaction log by Dec. 31,
Sikorski said.
Preventing use of industrial-gas offsets during the
following four months may amount to "retrospectively changing
the rules for phase two," Hobley said. Peter Zapfel , head of
policy co-ordination in the commission's climate unit, declined
to comment.
+------------------------------------------------------------------------------+
Emitters May Sue EU If Offset Limits Apply Early (Update1)
2010-10-22 14:44:46.607 GMT
(Adds EU officials starting from fifth paragraph.)
By Mathew Carr
Oct. 22 (Bloomberg) -- Factories and power stations in the
European Union's carbon dioxide program may sue if regulators
restrict use of offset credits for the four months through April
30, 2013, according to a lawyer at Norton Rose LLP.
Emitters in the program have been told they can use UN
offsets from industrial gas projects for compliance in the
second phase of the program through 2012, Anthony Hobley, a
partner at Norton Rose, said today in an interview in London.
The EU is now setting rules for the third trading phase
beginning in 2013.
Quality restrictions may apply as early as Jan. 1, 2013,
according to guidance published on Dec. 17, 2008. It's unclear
if those restrictions may apply to offsets surrendered from that
date for compliance in the second phase, the five years through
2012, said Trevor Sikorski, an analyst with Barclays Capital in
London. Emitters have four months after Dec. 31, 2012, to hand
in allowances or offsets to match their emissions for the year,
the final compliance year in the phase.
"Anyone affected by that certainly would have a case to
argue," Hobley said. EU regulators "should make it clearer"
precisely from when the restrictions may apply. Emitters can be
fairly certain about phase-two compliance as long as they
surrender their credits into the EU transaction log by Dec. 31,
Sikorski said.
Preventing use of industrial-gas offsets during the
following four months may amount to "retrospectively changing
the rules for phase two," Hobley said. Peter Zapfel, head of
policy co-ordination in the commission's climate unit, declined
to comment.
HFC Credits
The plan to impose extra quality restrictions on the use of
United Nations emissions offsets linked to hydrofluorocarbons
after 2012 won't be retroactive, Jos Delbeke, director general
for climate at commission, said in an interview in Brussels on
Oct. 13 without elaborating.
The European Commission, the EU regulatory arm, is
considering limits on the UN's carbon credits from projects that
cut the industrial gas HFC-23 amid allegations of misuse. UN
offsets, or Certified Emission Reductions, are awarded on
projects that lower emissions in developing nations and can now
be swapped one-for-one with permits in the EU's cap-and-trade
program, the world's largest.
Some traders already are betting that CERs issued after
Dec. 31, 2012, may be less valuable. The premium of the December
2012 Certified Emission Reduction future over the contract for
March 2013 rose to as wide as 70 euro cents ($0.97) a metric ton
on Oct. 13 and was at 65 cents today, according to prices on the
European Climate Exchange in London. There was a gap of 10 cents
in September.
Any developer expecting credits from industrial gas
projects in the first quarter of 2013 "will have to take a
view" on whether they want to sell on exchange and risk those
credits being deemed non-compliant, Sikorski said yesterday in
an e-mailed research report. "It may not be the intention of
the European Commission to apply the restrictions that early,
but it is hard to say in practice what will happen."
For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
--With assistance from Ewa Krukowska in Brussels. Editors: Raj
Rajendran, Todd White.
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
