Carbon credits are a key component of national and international emissions trading schemes that have been implemented to mitigate global warming. They provide a way to reduce greenhouse effect emissions on an industrial scale by capping total annual emissions and letting the market assign a monetary value to any shortfall through trading. Credits can be exchanged between businesses or bought and sold in international markets at the prevailing market price.

The Kyoto Protocol (1997) agreed “caps” or quotas on the maximum amount of Greenhouse gases for developed and developing countries. In turn these countries set quotas on the emissions of installations run by local business and other organizations. Since 2005, the Kyoto mechanism has been adopted for CO2  (carbon) trading by all the countries within the European Union under its European Trading Scheme (EU ETS) with the European Commission as its validating authority, and many other countries internationally. Carbon emissions permits traded under the EU ETS are called EU allowances (EUAs) whereas in non-EU countries such permits are called certified emissions reductions (CERs).

For trading purposes, one EUA or CER is considered equivalent to one metric tonne of CO2 emissions. These credits can be sold privately or in the international market at the prevailing market price. These trade and settle internationally and hence allow allowances to be transferred between countries. The carbon market was worth USD 30bn in 2006 and doubled in value to USD 63bn in 2007. Projections estimate the market to be growing to USD 500bn by 2012 and USD 3 trillion by 2020. Atlas Capital is dynamically expanding its business presence in the emissions universe and currently offers three opportunities to participate in this thriving market:

Emissions brokerage

We provide a high quality and swift professional access to a broad range of instruments and contracts including exchange-traded and OTC products. Our direct market access to Bluenext facilitates our clients with a simple and effective gateway to the carbon emission markets. Our excellent customer service spares our participants from lengthy negotiation processes and complicated compliance issues with the exchanges. Key advantages Atlas Capital offers:
 • On the day settlement of cash and allowances
 • Simple access to market places
 • Uncomplicated and economical order placement over the phone from anywhere
 • No joining fees or membership requirements
 • Complete confidentiality
 • No minimum amounts
 • No costs for training in house traders
 
 The trading process:

Emissions management

Having a solid trading strategy for your emissions allowances is essential for a professional management minimizing risk and taking advantage of the opportunities in the market. For certain needs it might not be sufficient to buy or sell emissions at the beginning and end of the year only. In this case adopting a more active trading approach increases the value chain considerably. Various fundamental and technical factors can influence the price for certificates resulting in potentially high volatility and substantial losses. With our specialist team you can draw from a vast pool of know-how assisting you in managing your emissions portfolio.

Energy & emission consulting

Atlas Capital has established a strong partnering network with internationally respected energy specialist accumulating experience in more than 1300 projects worldwide. Contracts have been carried out in the public and private sector ranging from energy policy, energy technology as well as energy economics to energy regulation. Performed projects include feasibility studies, evaluating investment opportunities and preparing investment plans, to technical studies, licensing, environmental due diligence and project management. Atlas Capital provides first class partnerships catering for cost efficiently managed energy solutions.

DISCLAIMER: When investors are investing in Carbon credits they are exposed to several risks, such as:

 - Political risk due to ambiguous legal regulation, a complex regulatory framework, uncertainty over carbon caps after 2012 as global agreements have to be renegotiated and constant pressures by industry to make the regulation less strict.
 - Liquidity risk caused by the lack of a variety of market participants due to the political risk above plus the recent introduction of carbon credits;
 - Counterparty risk; this is a crucial risk when the trade is Over-The-Counter, since the counterparty may default; alternatively, this could mean the inability of the counterparty to either transfer the funds if the trade is a Buy or to transfer the credits if the trade is a Sell.
 - Unanticipated drops in carbon emissions, caused e.g. by a global recession or rapid replacement of carbon-based fuels by renewable energies, thus causing a sudden drop in demand for carbon credits.