Traders Buying EIB CO2 May Have Privileged Data, IETA Says

Companies buying 2013 European Union carbon permits directly from the European Investment Bank may have “privileged” information that other traders don’t have, according to an emissions trading lobby group.

“It’s not very easy to assess the impact” of the sales, because they are confidential, said Simone Ruiz, Brussels-based European policy director at the International Emissions Trading Association. “There are many rumors and that’s not helpful.”

The lack of public information about the commencement of the sales means that “if you are a recipient of a large volume you are in a privileged position,” Ruiz said today by phone. “The market wants more transparency.”

The EIB may have last week begun selling privately the first tranche of 200 million EU permits for the third phase of the EU’s emissions trading system, which begins in 2013, to fund renewable energy and carbon capture projects as part of the EU’s drive toward a low-carbon economy. The permits are worth as much as 1.5 billion euros ($2 billion).

Nick Antonovics, a spokesman for the Luxembourg-based EIB, declined to comment on criticism of the sales process when reached today by phone and e-mail.

“The EIB has stated repeatedly, including on our website, that we would start sales soon after delivery but would not be making any other statements regarding timing,” Antonovics said. “Results for December will be published by the middle of January.”


IETA is continuing internal discussions on precisely what information and changes it will seek from the commission and the EIB, Ruiz said.

“There have been some accusations of market manipulation,” Ruiz said, referring to price volatility in carbon contracts since the start of December. “I can’t judge on that,” she said.

On Dec. 2, the European Commission in Brussels delivered 300 million phase three allowances to the EIB, 200 million of which need to be sold by Oct. 2, 2012.

EU carbon for 2013 dropped to 7.78 euros ($10.13) a metric ton on Dec. 6, a record low at the time. It rebounded to as high as 9.18 euros a ton on Dec. 12, the day after nations at climate-protection talks in Durban, South Africa, decided to seek a global agreement by 2015. That’s an increase of 18 percent in six days.

The contract fell 1.2 percent today to close at 7.69 euros on the ICE Futures Europe exchange in London. It dropped as much as 3.3 percent in intraday trading. The record low of 7.26 euros was reached on Dec. 14.

The bank has a mandate to impact the secondary market as little as possible while selling, Ruiz said. “We would have preferred them to start on exchanges” and it’s unclear when they will start to do that, she said.

The market would probably like more information on the price structure used and number of parties the EIB is dealing with as it carries out the sales, Ruiz said.

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