Part I: Background and concepts

The EU emissions trading scheme became live in January 2005, swiftly followed by the ratification of the Kyoto Protocol in February 2005. Now four months into the scheme, the price of carbon has rocketed, reaching Euros 17/tCO₂e in April, up from 8 Euros in early January. In preparation for the publication of our emissions trading report, due out at the end of May, this article explains the background to, and concepts of, the EU emissions trading scheme. Part two, in next month’s Mzine, will focus on the operation and impact of the scheme. Figures are taken from the draft report, The EU emissions trading scheme: a practical guide, to be published by the Energy Publishing Network in the next month.

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mWELCOME

Hello and welcome to the May issue of MZINE, our free monthly newsletter. 

This month we will be looking at Emissions trading, see MSTORY for our main article and also MFEATURE “Let's have a clean fight . . .” by Paul Dillon, which was featured in the Times on 29^th March 2005. At MPRICES we take a look at the Oil Forward Curve, whilst at MPHASIS Derek, has produced a new angle on emissions trading in this month's cartoon. Don't forget to check out our thought of the month at MPATHY, or our latest training news and courses at MTRAIN.  

If you have an article you would like to contribute, then please let me know, we can’t promise to include everything, but we will do our best.

And if you have enjoyed reading this newsletter and think you know someone who might also enjoy it then feel free to forward it on.

Kind regards

Paul Cassar
Editor
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mTRAIN

We are pleased to announce that solicitors attending our Emissions Trading one-day seminar are now eligible for CPD points from the law society. Attendance at any of our events may also contribute to meeting accountancy CPD requirements under the terms of the ICAEW’s CPD policy. Please visit www.icaew.co.uk/cpd for full details.

Over the next few months, the following training courses are being held in Oxford, England. They are all one-day events apart from the EU Gas Markets course which is an exciting two-day examination of EU gas market principles including an analysis of six European countries.  More information about these courses can be found by clicking on the course title or visiting energytrainingnetwork.com and clicking on public courses. Alternatively you can contact me by email or phone 
+44 (0) 1865 395826, fax +44 (0) 1865 395959

OTHER DATES

Course Review

Introduction to Emissions Trading

As the EU Emissions Trading Scheme takes effect, it is clear that many new issues will arise. Risks involved in monitoring and reporting; regulation, trading and accounting by companies new to the arena; aspects of mergers and acquisitions, new contracts, pooling, permits and licensing requirements will need to be addressed.  

'An Introduction to Emissions Trading' presented by the Energy Training Network, offers a very accessible and comprehensive means to gain sufficient knowledge to enter this new scenario with a very good foundation. Beginning with just a little understanding of the scheme, the delegate is introduced to the subject of climate change and the scientific research which led to the inception of the Kyoto Protocol. Evidence is presented to support the probability that anthropogenic activity and the over-production of greenhouse gases (GHGs) is responsible for what we now term, global warming. 

Read the rest of this review

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mPRICES
FORWARD OIL CURVE

Rising crude oil stocks in the Atlantic Basin are depressing prompt crude prices, pushing the forward curve into a deep contango. However, longer-term WTI prices remain high, reflecting market concerns about strong demand growth, faltering non-OPEC supplies and OPEC’s price objectives. Crude stocks in the US midcontinent – which contains the delivery point for the Nymex light sweet crude contract – are 7 mn bbls up on last year’s levels, putting additional downward pressure on prompt WTI prices.

Although stocks are rising in this quarter, the industry badly needs to rebuild its depleted inventories if it is to avoid hitting downstream capacity limits as global oil demand sets new records later this year. OPEC, though, seems reluctant to let prices fall much below $50/bl and has yet to boost production as promised last month. The balance of Calendar 2005 WTI is over $55/bbl – equivalent to $54/bbl for Brent and just over $50/bbl for the OPEC basket of crudes.

Reproduced from CGES Monthly Oil Report with kind permission of CGES. www.cges.co.uk

mPHASIS!
for the lighter side of life!

"Having reached our maximum emissions allowance, staff are kindly requested to stop smoking"
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mPATHY
thought of the month!

Kind words can be short and easy to speak, but their echoes are truly endless. Mother Teresa

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mOFFERS
this month's exciting offers!

For 2005 we have produced a high quality A2 year planner detailing all of our training courses as well as space for you to mark those other important events. There is also other useful information such as a conversion chart relevant to the energy industry and netconnections, a list of web addresses at your fingertips. To receive one, please send me an email with your postal address and I will send you one with our compliments*. 

*(while stocks last)

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mFEATURE

Let's have a clean fight . . .
Companies are calling for greater fairness from European action to combat pollution

LEGAL challenges are stacking up throughout Europe from companies dissatisfied with the new measures under the Kyoto Protocol to cut greenhouse gas emissions. The dissatisfaction is unsurprising: the measures, from the European Commission, could make or break companies.

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