The Global Carbon Market from the view of a by joz20876

VIEWS: 7 PAGES: 13

									The Global Carbon Market from
the view of a Compliance Buyer

1st Workshop on the CDM Process in Libya
29 October 2009, Tripoli - Libya

Thomas Gulden, Climate Protection, RWE Power AG
RWE Group – Key facts

> The RWE Group is one of Europe’s leading electricity and gas
  companies (among the TOP 5 utility companies). Our major
  markets in power generation, sales and trading are located in
  Germany, the UK and Central Eastern Europe.

> In Libya, RWE’s upstream subsidiary RWE DEA is active in
  the exploration of hydrocarbons since 2003. The company’s
  assets are located in the Sirte, the Cyrenaica and the Kufra
  basin.

> RWE is represented on the Carbon Disclosure Leadership
  Index, which lists those companies, playing a pioneer role in
  climate protection, regarding reporting and overall strategy.

> In 2008, with 66,000 employees, RWE generated €49 billion in
  external revenue.
                                                   RWE Power AG 29/10/2009   PAGE 2
Acceptance of a Carbon Constraint World

> Early mover with participation in the Prototype Carbon Fund
  of the Worldbank in 2000.

> RWE Trading started first forward European Allowance
  (EUA) deals in 2003.

> Compliant under the European Emissions Trading Scheme
  (EU ETS) since 2005.

> To date active in 122x Clean Development Mechanism
  (CDM) and 6x Joint Implementation (JI) Projects, either
  directly or through Joint-Ventures with Agrinergy and
  Carbon Climate Protection.

  Adaptation by RWE to the carbon constraint world was
  quick and is based on a long-term strategy.

                                                    RWE Power AG 29/10/2009   PAGE 3
Pipeline of CDM projects & regional distribution

                 Number of Projects     2008-2012 kCERs
Latin America     819       17,5%      391.400                14%

Asia & Pacific    3.646     78,0%     2.255.535             81,0%

Europe &           48       1,0%        21.409               0,8%
Central Asia
Africa            112       2,4%        84.157               3,0%

Middle-East        48        1,0%       33.319               1,2%

Total in the      4.673     100%      2.785.819              100%
CDM pipeline

                                      Source: UNEP RisØ Centre, October 2009


                                                               RWE Power AG 29/10/2009   PAGE 4
Success Rates: Idea to Certificate Issuance




                                   RWE Power AG 29/10/2009   PAGE 5
Current sector distribution of CDM projects




                          Source: UNEP RisØ Centre, October 2009


                                                   RWE Power AG 29/10/2009   PAGE 6
Price Developments: CER Future Contracts
                                                    ECX CER Futures Contracts: Price and Volume
                                                                                                                                                 T o t a l V o lum e         D ec09 Sett



                      12.000.000                                                                                                                                                 € 25,00

                                                                                                                                                                                 € 23,00
                      10.000.000
                                                                                                                                                                                 € 21,00

                                                                                                                                                                                 € 19,00
VOLUME (tonnes CO2)




                       8.000.000




                                                                                                                                                                                             Price per tonne
                                                                                                                                                                                 € 17,00

                       6.000.000                                                                                                                                                 € 15,00

                                                                                                                                                                                 € 13,00

                       4.000.000
                                                                                                                                                                                 € 11,00

                                                                                                                                                                                 € 9,00
                       2.000.000
                                                                                                                                                                                 € 7,00

                                0                                                                                                                                                € 5,00
                                   8      8      8      8      8      8      8      8      8      8      8      9      9      9      9      9      9      9      9       9
                                 00     00     00     00     00     00     00     00     00     00     00     00     00     00     00     00     00     00     00      00
                             3 .2 .04 .2 .05 .2 .06 .2 .07 .2 .08 .2 .09 .2 .10 .2 .10 .2 .11 .2 .12 .2 .01 .2 .02 .2 .03 .2 .04 .2 .05 .2 .06 .2 .07 .2 .08 .2 .09 .2
                           .0 5
                        14      1      14     11     09     06     03     01     29     26     24     26     23     23     22     20     18     16     13     10
                                                                                                                         http://www.ecx.eu/CER-Futures, October 2009


                                                                                                                                                                   RWE Power AG 29/10/2009                     PAGE 7
     State and Trend of a Post Kyoto Agreement

     > Dec. 2007, President of the UNFCCC, after COP 13 in Bali:
       „I am delighted to say that we have finally achieved the
       breakthrough the world has been waiting for: the Bali Roadmap!“

     > Apr. 2009, Executive Secretary of the UNFCCC, after Climate
       Change Talks I in Bonn:
       „[Countries] now have the necessary clarity to move into
       intensified negotiations based on texts.“


        UNFCCC            UNFCCC            UNFCCC             UNFCCC           UNFCCC
                                            informal                                                  Copenhagen
      Bonn Climate      Bonn Climate      Bonn Climate      Bangkok Climate   Climate Change
      Change Talks I   Change Talks II                      Change Talks IV       Talks V                                 Time for
                                         Change Talks III                                              Post Kyoto        Ratification
                                                                                                       Agreement?         Process?
UN
         March 09            May 09             July 09           Sept. 09          Nov. 09                Dec. 09



                                                                                               RWE Power AG 29/10/2009      PAGE 8
State and Trend of the EU ETS

> Since January 2005 ~11.000 Installations in the energy and
  industry sector participate in the mandatory EU ETS.

> EU Commission proposed a review of the EU ETS Directive in
  December 2008:

  – EU ETS Phase III from 2013 to 2020.

  – Introduction of auctioning as the dominating allocation method
    for the future.

  – Comitology process on 13 issues to start early 2010.

  – Redemption capacity for the use of CDM and JI credits from
    2008 to 2012 expanded to 2008 to 2020.

                                                    RWE Power AG 29/10/2009   PAGE 9
Uncertainty about CDM/JI Project Quality
eligible in the EU ETS Post 2012
> No International Post Kyoto Agreement

  – Exclusion of project types for EU ETS eligibility possible, but to
    which extent?

  – Discrimination of CDM/JI host countries possible, but to which
    extent?

> International Post Kyoto Agreement established

  – CERs/ERUs only allowed from host countries which ratified the
    Agreement, but

  – future emission reduction obligations by CDM host countries?

                                                       RWE Power AG 29/10/2009   PAGE 10
A consistent Global Carbon Market is essential

                    Instruments
                                                           > Requirements, that need to
                                                             be fulfilled, to raise the EU-
                                                             reduction target to 30%.
 Burden-         CO2-        Financing     Techno-
 Sharing        Trading                      logy          > In case of     „dilution“ of
                                                             requirements: compensation
                                                             on EU/national level.



1.   Comparable reduction targets for industrialized as well as developing countries
     (meaning emission caps), reduction measures for developing countries.
2.   Coverage of all sectors (energy, industry, transportation, agriculture, households).
3.   Step-by-step creation of a truly global carbon market.
4.   Equal treatment of physical and financial offsets. JI/CDM is the preferred bridge to a
     global carbon market.
5.   Promotion and transfer of low carbon emission generation technology.

                                                                        RWE Power AG 29/10/2009   PAGE 11
Conclusions

> The EU ETS is the main global carbon market driver right now.

> EU ETS Review for Phase III is on a good way forward, but

  – depending on an Post Kyoto Agreement 2012, and therefore

  – uncertainty through possible limitations of eligible project
    types and CDM/JI Host Countries.

> Uncertainty provides carbon market distortions and hinders
  long-term investments in new emission reduction projects.

> Consequently, Libya could support these developments by
  implementing CDM as soon as possible and help providing
  security for an ongoing global carbon market post-2012.

                                                    RWE Power AG 29/10/2009   PAGE 12
Thank you very much for
    your attention!

								
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