DuPont and Marubeni Execute First UK Greenhouse Gas Emission Allowance Trade
DuPont and MIECO Inc. announced the first-ever transaction of greenhouse gas emissions allowances under the United Kingdom's newly developed trading scheme. The transaction marks an important milestone in the development of market mechanisms to limit greenhouse gas emissions.
Under the Natsource brokered trade, DuPont sold 10,000 vintage 2002 greenhouse gas emissions allowances on a forward basis to MIECO Inc., a subsidiary of Tokyo-based general trading company Marubeni Corporation. The allowances were traded under the UK regulatory system for emissions trading that was launched in mid-August.
In the UK emissions trading system, companies that emit greenhouse gases may join a government program setting corporate targets for reductions of these emissions. Companies that surpass reduction targets may sell excess allowances in the marketplace.
"We are delighted to be a part of the first-ever UK trade and strongly support the development of an efficient market-based approach to greenhouse gas emissions trading," said Paul Tebo, corporate vice president of DuPont Safety, Health and Environment. "An emissions trading system will optimize the use of resources and encourage the development of additional projects to reduce greenhouse gas emissions."
The Tokyo-based Marubeni is a global trading and investment company with 149 overseas offices and subsidiaries in 75 countries. Marubeni's global oil and gas portfolio includes production in the North Sea. Marubeni plans to explore how the greenhouse gas emission markets can contribute to its subsidiaries and clients achieving its environmental objectives.
"MIECO values the transaction with DuPont as this marks the start of a new era for the industry to take initiative to address environmental compliance objectives. We welcome the growth of this market," said Ryoichi Kabatake, Chief Executive Officer of MIECO Inc.
UK greenhouse gas allowances can be used by any company for compliance with targets set under the domestic UK program. In the future, it is possible that the UK initiative may link up with other countries in a broad international emissions trading system under the Kyoto Protocol.
Welcoming the first piece of business on the UK's new market in greenhouse gas emissions, Environment Minister Michael Meacher said, "This is an important kick-start for the market. Any trade in allowances, combined with the main thrust of the Government's strategy through domestic action, contributes to the success of the UK climate change programme, including the UK emissions trading scheme, and the development of international trading."
International energy and environmental broker, Natsource, brokered the transaction.
"The transaction between MIECO and DuPont is significant because it is the first trade of UK allowances that will comply with an emission reduction requirement," said Michael Intrator, managing director, Global Emissions Markets at Natsource. "The trade also highlights that companies can utilize the global trading market to achieve economic and environmental objectives."
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