Commodities trading specialist CF Partners is offering what it says will be an easy way for aircraft operators to buy and sell carbon credits as part of their obligations under the European Union’s emissions trading scheme (ETS). The service has been launched in partnership with ETS Aviation, which already helps operators with the carbon emissions monitoring, reporting and verification aspects of ETS compliance, with its Aviation Footprinter and Support Services products.
ETS customers will be able to trade credits online via the new Carbon Exchanger link at its website. The trades will be handled by CF Partners, which has several years of experience in trading carbon credits for other industries that were subject to emissions trading before it was introduced for aviation.
London-based CF Partners is willing to buy and sell the small numbers of credits that business-aircraft operators and smaller airlines generally require. Some banks involved in carbon trading are not willing to conduct trades for less than 10,000 or even 25,000 credits.
According to Finn Payne, an aviation specialist with CF Partners, the company is also different in that it doesn’t trade only within its client base. “We are active in the [wider] market and so we hold a lot of credits on our books and have a reputation as a market maker and liquidity provider,” he told AIN. CF can also provide operators with online guidance on trends in the carbon credit market, as well as help in opening the registered accounts they need to comply with ETS.
“Small- and medium-size operators are concerned about this because carbon trading is an unwanted headache and they don’t have a clue where to go,” said ETS Aviation marketing director Godfrey Haslehurst.
There are no direct fees for using Carbon Exchanger, all fees being incorporated into the prices paid for the credits. The fees are on a per-transaction basis, varying according to the size of the trade.
According to Payne, the carbon credit market is currently quite volatile and this is mainly due to regulatory uncertainty caused by political controversy about whether ETS can be imposed on non-European operators. With the market oversupplied, prices for credits have fallen and the European Commission is considering ways to reduce the number of available credits, such as reducing the number of industry-specific EU Aviation Allowances (EUAAs). In theory, this could be a good time for aircraft operators to buy the standard allowances (rather than the EUAAs). Importantly, companies would still be able to sell the standard allowances even if non-European operators end up being exempt from EU-ETS.