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It pays to take care of the environment |
It is in the SSE's strategic interests to develop and enhance the business relationship with the customer. SSE, a.s. wants to offer its large commercial customers a wide range of services including brokerage of purchase or sale of emissions.
The electricity and emission allowance markets are closely interrelated; SSE dealers are constantly monitoring and analyzing both markets and owing to their know-how, they are able to carry out a transaction under very favourable conditions for the client.
SSE offers brokerage in the sale/purchase of allowances not only to its current customers in the territory of the central Slovakia , but also to other companies in the whole of Slovakia . Thank to its access to all relevant exchanges with CO 2 allowances, SSE is able to choose the right product for the client.
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What is emissions trading? |
The European Emissions Trading Scheme (EU ETS) is a cornerstone in the fight against climatic changes. It is the first international system of CO2 emissions trading in the world. The Emissions Trading Scheme covers a total of 12,000 industrial installations within the European 25. These installations produce around 50 percent of all the greenhouse emissions in the EU. Altogether 6,572.4 million emission allowances have been allocated in the EU for the period of 2005 - 2007. The scheme includes 167 plants operated by 128 companies in the Slovak Republic.
At the moment the unit used in the emissions trade is EUA (EU allowance); one EUA represents a permit to release one metric ton of CO2 per year into the atmosphere. In other words, we call them emissions or allowances.
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What is the principle of emissions trading? |
Each obligatory participant of the EU ETS has been granted allowances for an allocation period of 2005 - 2007. Each year by the end of April, companies have to return the allowances equalling the total CO2 emission in the previous year to the administrator. Companies may sell or keep the excessive allowances; on the other hand, the deficit needs to be compensated for by the purchase of reserves on the market. Therefore the management of greenhouse gas trading becomes an important factor directly affecting the financial performance of large companies.
Up until 2005 emissions trading in Slovakia had been blocked due to the non-existence of the National Emissions Register. However, given the fact that it was fully launched on 23 December 2005, the market began working immediately and grew rapidly. Experience shows that Slovak companies have an excess of emission allowances and mostly sell them to the Western Europe. Emission allowances are in electronic form, standardised, not limited by borders and can be sold in any EU member state.
The price of emission allowances depends on supply and demand as on any other free market. Current exchange prices of allowances are available for example at www.pointcarbon.com, www.nordpool.com or www.eex.de.
- Knowledge of the client and long term business relationship SSE client.
- Knowledge of the market and access to all important European commodity exchanges.
- Simple transactions - via telephone.
- Zero annual fee.
- Zero transaction fee.
- The ability to aggregate bids/ demand from several clients or no limit for the volume of transaction.
- Zero clearing and settlement fee.
- Credibility and stability of the company.
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Example of an emissions transaction |
(e.g.: a Slovak company sells EUA):
1. Assessment of creditor's risk - optional
- SSE may request verification of creditor's risk; however this is not required from current customers.
2. Conclusion of a Framework agreement
- A Framework Agreement between the customer and SSE is concluded that will define the basic framework for emissions trading. If you are interested in trading with our company please first contact our Key Account Managers.
3. Transaction arrangement
- The customer and the SSE manager arrange individual transactions over the telephone. The customer specifies the type of transaction (purchase or sale), transaction amount, target price, instruction validity period and other conditions.
4. Order acceptance confirmation
- After the customer gives SSE an instruction for the sale of emissions, he will receive an Order Acceptance Confirmation from SSE. The customer then has a 30 minute period to submit comments on the transaction, if any.
5. Allowance / purchase price acceptance
- The customer then transfers the corresponding quantity of emissions to the SSE account. The customer may also provide other comparable guarantees. SSE then issues the Allowance Acceptance Confirmation.
6. SSE is trades on the market
- SSE tries to sell the accepted order. If the market price corresponds to the target price, the transaction is automatically concluded and SSE issues a Confirmation of Successful Transaction. If the target price is not achieved, SSE undertakes to return the accepted emissions to the customer's account.
7. Invoicing
- Based on the Confirmation of Successful Transaction the seller issues an invoice for the sold emission allowances.
8. Purchase price transfer
- SSE transfers the purchase price to the customer's account without undue delay after having received it from a third person.
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Updated documents for download |
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