Carbon Credits

The Kyoto Protocol of 1997 as the first international agreement with legally binding targets for reducing greenhouse gas emissions laid the floor for the “Kyoto mechanism” under which emission targets should be met primarily through national measures. The agreed “caps” or quotas on the maximum amount of greenhouse gases from industrialized countries can additionally be met using three market-based mechanisms namely the Emission Trading Schemes (ETS), Joint Implementation Schemes (JI) and the Clean Development Mechanism (CDM).

Carbon credits are the key component of national and international emissions trading schemes that have been implemented to mitigate global warming. They provide a way to reduce greenhouse effect emissions on an industrial scale by capping total annual emissions and letting the market assign a monetary value to any shortfall through trading. Credits can be exchanged between businesses or bought and sold in international markets at the prevailing market price.

Since 2005, the Kyoto mechanism has been adopted for CO2 (carbon) trading by all the countries within the European Union under its European Trading Scheme (EU ETS) with the European Commission as its validating authority. Carbon emission permits traded under the EU ETS are called EU allowances (EUAs) whereas emission allowances issued under the Clean Development Mechanism are called Certified Emission Reductions (CER).

For trading purposes, one EUA or CER is considered equivalent to one metric tonne of CO2 emissions. These credits can be sold privately or in the international market at the prevailing market price. These trade and settle internationally and hence allow allowances to be transferred between countries. The carbon market was worth USD 30bn in 2006 and doubled in value to USD 63bn in 2007. Projections estimate the market to be growing to USD 500bn by 2012 and USD 3 trillion by 2020.

Atlas Capital is expanding its business presence in the emissions universe and currently offers three opportunities for participation:

Brokerage: Brokerage is aimed at the reactive counter part that wishes to trade its surplus emissions on the market to level its emissions balance. We provide brokerage services on environmental exchanges worldwide. High quality and swift professional access to a broad range of instruments and contracts including exchange-traded and OTC products.

Our direct market access to Bluenext facilitates our clients with a simple and effective gateway to the carbon emission markets. Fast negotiation processes is one of our key advantages, together with on the day settlement of cash and allowances, economical order placement over the phone from anywhere, etc.

Investment Management: Having a solid trading strategy for your emissions allowances is essential for a professional management minimizing risk and taking advantage of the opportunities in the market. For certain needs it might not be sufficient to buy or sell emissions at the beginning and end of the year only. In this case adopting a more active trading approach increases the value chain considerably.

Various fundamental and technical factors can influence the price for certificates resulting in potentially high volatility and substantial losses. With our specialist team you can draw from a vast pool of know-how assisting you in managing your emissions portfolio.

Advisory: With a strong partnering network with internationally respected energy specialist accumulating experience in more than 1300 projects worldwide. Contracts have been carried out in the public and private sector ranging from energy policy, energy technology as well as energy economics to energy regulation.

Performed projects include feasibility studies, evaluating investment opportunities and preparing investment plans, to technical studies, licensing, environmental due diligence and project management. Atlas Capital provides first class partnerships catering for cost efficiently managed energy solutions.