Banks and trading houses bought two-thirds of carbon permits

During the northern winter, there were more speculators in the carbon market than genuine players.

Those bankers must be very concerned about the environment.

Speculators main buyers in EU carbon auctions -report

17 May 2013

LONDON, May 17 (Reuters Point Carbon) – Banks and trading houses bought more than two thirds of the 138 million carbon permits sold by 25 European governments between Nov. 2012 and Feb. 2013 to help power plants and factories comply with the EU Emissions Trading Scheme, an EU Commission report published Friday showed.

Six “credit institutions” and six “investment firms” dominated the 35 auctions held over that period, picking up as much as 80 percent of the allowances sold in January alone, the report said, adding that only one of those companies was eligible to bid on behalf of clients.

http://www.pointcarbon.com/news/1.2378205 paywalled.

Things have changed in the carbon market. From 2005-2012 most allowances were given away free, but now they are being sold at auction. So the period starting Nov 2012 was probably the first sales under the new system. It is expected that the bankers and traders will sell the permits to the power companies in the futures market.

Hat tip: Scott the trader.

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