MK Brokers offers its clients:
- Spot and forward transactions with carbon emission quotas;
- EUA and EUAA quotas purchase directly from auctions;
- SWAP transactions for EUA/EUAA/CER;
- Exchange transactions for quotas;
- Direct purchase of CERs from project owners;
European emission reduction rights market:
Since 2005 the EU Emissions Trading Scheme (EU ETS) has become the leading global trading facility for corporate trading for caps and quotas for emissions carbon dioxide and other greenhouse gases (cap-and-trade market. The EU ETS is a major instrument for environmental pollution reduction. The battle against the climate change is encouraged via different economic stimuli for emission reduction of industrial greenhouse gases. EU ETS includes plants, electricity producers, air carriers and other ventures that produce greenhouse gases. Each and every year, before April 30, all members of EU ETS are required to fulfill their obligation for return the number of quotas equal to all the verified greenhouse emissions for the prior year.
The voluntary markets for emissions function supplementary to the other quota markets. The voluntary markets offer an opportunity to every company, NGO or individuals to voluntarily compensate their greenhouse emissions via the purchase of carbon credits. These credits can be created via one of the many standards for the voluntary market. The voluntary markets are part of the corporate-social responsibility ecosystem due to the market an public demand for such, but are not legally bound.
One unit of Voluntarily Emission Reductions (VER) cannot be used for any obligations fulfillment under the Kyoto Protocol Scheme. However, a quota that is scheme compliance (Certified Emission Reductions, CER) which is used for voluntarily compensations, can be accepted.
The VERs are an in-kind quotas, which prove a certain carbon offset has been carried out, and can be transferred in exchanges. These exchanges verify the quotas via different voluntary standards of verification, which directly or indirectly reduce the CO2 emissions. The VERs are used by institutions that want to voluntarily reduce their carbon print. Each VER quota is equal to a decrease of 1 ton of CO2.
Greenhouse gas emissions quotas are the instruments that certify the right of production of 1 unit of volume (1 ton) greenhouse gases. The Kyoto Protocol of 1997 is fundamental for the current regulatory framework for the trading with carbon emissions. The Protocol sets forth concrete requirements for all participating countries for the reduction of the greenhouse emissions as compared to their levels from 1990, which is set as the base year.
The Kyoto Protocol defines three mechanisms for expense optimization as to the engagements undertaken by the participating countries:
- European Emissions Trading Scheme (EETS), a leading mechanism in the policy of the EU to counter the climate change. This is a key instrument for the efficient reduction of the greenhouse gases generated by the industry. EETS started in 2005 and works on the cap-and-trade principle. There is a limit of the total volume of emissions for each participating country in the Kyoto Protocol. In these limits the participants to the EETS market can buy or sell emissions. The universally traded and settled instrument for the EETS market is the EUA (European Union Allowance). The EUAs are traded on several European exchanges with a large OTC market in existence. They can be traded both spot and forward.
- The Clean Development Mechanism: This mechanism is defined in art. 12 of the Kyoto Protocol and its goal is the support of the developing countries to achieve sustainability via allowing the financing of emission reduction projects from developed to developing countries. The developed countries thus can receive CERs. The Clean Development Mechanism sets forth the different stages through which each project has to be certified in order for it to receive a given number of CERs. The major principle of the Mechanism is the certification and validation of the fact that via the investment in a certain project there is a real reduction of the greenhouse gases emissions. CERs are issued based on the Clean Development Mechanism of the Kyoto Protocol. Their measurement unit is one tone of carbon dioxide equivalent. The CERs can be traded and applied by the developed countries for the fulfillment of their obligations under the Kyoto Protocol. In addition, due to the application of the “Connection Directive” of the EU, these credits can be used up to a certain amount from the institutions that participate in the EETS.
- Joint Implementation: A protective mechanism between two participating countries. Each ton of carbon dioxide that is reduced via the implementation of a joint project between the two countries generates the so-called Emission Reduction Unit (ERU).