Fri 5 Oct 2012 – Increased demand from airlines and aircraft operators for EU Aviation Allowances (EUAAs) to meet their compliance obligations under the EU ETS has led to the forming of a strategic partnership between ETS Aviation and London commodities trading house CF Partners. Under the partnership, ETS Aviation, a specialist in fuel-efficiency programmes and emissions data management, has set up the Carbon Exchanger service to provide easy access to the carbon market for operators, irrespective of their size and the volume of credits they are looking to trade. As operators approach the 30 April 2013 deadline by which date they must surrender credits to cover their 2012 emissions, CF Partners says it has seen a significant increase over recent months in its activity in the carbon market.
Under the terms of the partnership, ETS Aviation has set up a link for its clients to register with CF Partners, which will execute and manage trades.
“CF Partners is working hard alongside our partner ETS Aviation to help develop an efficient and liquid market for aviation allowances, which is essential if airlines are to successfully risk manage their carbon exposure,” said John Davis, the firm’s Emissions Trader.
ETS Aviation, which offers the Aviation FuelSaver and Aviation Footprinter software and consultancy services, said it has had many requests for help from aviation clients who were unsure about who to contact and how to go about buying or selling carbon credits in the open market. Whether trading for value spot or forward settlement, it says the Carbon Exchanger service will, via CF Partners, be able to help clients execute trades quickly at a competitive price.
“We have long-held concerns about how some operators would be able to access the carbon market,” said Godfrey Haslehurst, marketing head for ETS Aviation. “This partnership is a really exciting development and will help us greatly in our aim to be the high-quality, low-cost, one-stop shop for the aviation industry.”
In May, CF Partners, which specialises in the renewables, commodities and energy markets, announced a partnership with the European Energy Exchange (EEX) to support market liquidity for aviation allowances, EUAs and CER futures by becoming a market maker.
EEX was recently appointed by the European Commission as the transitional auction platform for Phase III (starting 2013) EU allowances on behalf of 24 EU member states – it excludes Germany, Poland and the United Kingdom, which opted out, although Germany has separately appointed EEX as its auction platform.
In Phase III of the EU ETS, the auctioning of allowances becomes the principle means for allocation. More than half of the total volume of allowances will be auctioned in Phase III compared to around 4% in Phase II. EEX expects some 30 million EU Aviation Allowances (EUAAs) per year will be auctioned between 2012 and 2020.
The German Emissions Trading Authority (DEHSt) has announced it is to auction up to 7 million EUAAs in two tranches over the next two months, with the first taking place on October 17 of 2.5 million EUAAs.
The aviation sector is the second biggest industry to be integrated into the EU ETS.