Carlsberg to Pirelli Units Opting to Leave EU Emissions Market
Stock Chart for Carlsberg A/S (CARLB)
Units of companies from brewer Carlsberg A/S (CARLB) to tiremaker Pirelli & C. SpA whose greenhouse-gas output falls below a European Union minimum are quitting the European Union’s emissions market.
Polluters emitting less than 25,000 metric tons of carbon dioxide equivalent a year that participated in the EU trading system from 2008 through 2012 are boosting sales of unused permits to close their accounts and avoid paying the registry fees needed to stay in the program, Milan Hudak, an analyst at Virtuse Energy sro in Prague, said without providing details. Less-intensive emitters can quit the EU system as long as their governments have separate measures to cut greenhouse-gas output.
Prices in the EU’s emissions market, the world’s largest, have slumped 57 percent from a year ago as the euro area’s second recession since 2008 cut demand for allowances. More than 12,000 plants in Europe have until today to hand over EU permits or United Nations carbon offsets matching their emissions in 2012 or pay fines of 100 euros a ton.
“We started to see interest to sell permits from smaller plants at the end of 2012, though most of it has taken place in March and April,” Hudak said. “Some are waiting to sell in May or June, as they think prices may improve.”
A total of 248 out of 1,196 installations in the U.K., or 20 percent of the total that participated in the EU’s emissions trading system from 2008 to 2012, have withdrawn from the market this year, according to a March 4 document posted on the government’s Department of Energy and Climate Change website. These include facilities owned by Carlsberg, Pirelli, London’s Stansted airport and more than 50 hospitals.
The European Commission didn’t respond to e-mail requests for details of plants opting out in all 27 member states.
The EU’s carbon system, started in 2005 to help meet emission-reduction targets under the Kyoto Protocol, allocates tradable allowances every year to factories and utilities that must be surrendered to cover their emissions. Polluters can buy emission rights to meet their limit in the market, or sell allowances they don’t use.
Permits to meet emissions targets in the five years through 2012, known as Phase 2, fell 47 percent this month to 3.27 euros ($4.24) a ton on ICE Futures Europe exchange. The contracts for prompt delivery were 6.43 euros at the start of the year.
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