Orbeo

The climate change issue is here to stay

Climate change risk has recently become a top item on the political agenda worldwide. Recent reports such as the one by the Intergovernmental Panel on Climate Change (IPCC) show mounting evidence of man’s influence on climate evolution and on the increasing frequency of extreme weather events such as droughts or storms. Going forward, impact could also take the form of accelerating increases in sea levels, reduction in biodiversity, changing crop patterns, renewed spread of tropical diseases or reduced water availability. The first collective response to mitigate the risk was the Kyoto Protocol, signed in 1997. Extensive public awareness now makes it likely that a successor to this international agreement, involving a larger number of countries, will be agreed on in the coming years.

Rhodia, Paulinia site, Brazil

Emission reduction projects and emissions trading have been the most rapidly emerging response

From the start, market mechanisms have been chosen as one of the key tools to address the climate change issue. Since it originates in anthropogenic greenhouse gas (GHG) emissions - CO2 being the most common one - regulating volumes appeared as the most appropriate action path. The Kyoto Protocol is thus expressed in terms of emission reductions targets. Trading of emission permits, or allowances, has been put in place, both under Kyoto and in subordinated mechanisms such as the EU Emission Trading Scheme (ETS). The carbon price that emerges through the transactions provides the incentive to reduce emissions to the participants that can do it most competitively. Thereby, it ensures the lowest collective, as well as individual, costs to meet the constraint. Carbon markets today receive wide attention from all parts of the world, and especially from countries such as The United States or Australia, that envisage rapidly joining the fight against climate change. Post 2012, market should remain one of the central tools and linking of the various regional schemes is already discussed.

Orbeo is the first emissions trading JV between a financial services group and an industrial group

Orbeo, a 50-50 joint-venture between the bank Société Générale and the specialty chemicals company Rhodia, was created in July 2006. The first of its kind, Orbeo combines Société Générale’s market and financing capabilities with Rhodia’s industrial expertise in emission reductions. Orbeo is based on the CO2 assets generated through one of the largest greenhouse gas transactions under the Clean Development Mechanism (CDM). It enjoys exclusivity over about 11 to 13 Mt CO2 equivalent Certified Emission Reductions (CER) generated per year between 2006 and 2013. The two large projects from which the CER originate are among the few already issuing CERs. Orbeo is also developing new emission reduction projects worldwide, using various abatement technologies, to complement its CER portfolio. It is operationally backed by its two parent companies and has dedicated resources in origination, trading, marketing and all key support functions. Orbeo is already one of the largest market participants in the different carbon markets, both in CER as well as European Union Allowances (EUA) transactions. Orbeo is thus one of the few organizations that is entirely present on the carbon value chain. It is dedicated to buying and selling all types of carbon instruments worldwide, originating new streams of CER/ERU/VER and developing CDM/JI/CCX projects, building and growing a strong trading and risk management team. With dedicated resources in Asia, South America, Europe, Middle East and Africa, Orbeo is able to bring together the best teams to accompany the growth of the carbon market around the world.

Orbeo is uniquely placed to offer comprehensive solutions to manage GHG exposure

For governments and businesses, measuring and controlling emissions will have an increasing significance. Orbeo’s aims to offer comprehensive solutions to its clients for their GHG exposure management. It is currently developing extensive expertise in the main emerging carbon markets (including EU ETS, UK ETS, Chicago CCX, Australian NSW and Kyoto International Emission Trading). It covers all the carbon products, offers the widest range of services available and is able to structure complex, cross-commodity transactions, also using sophisticated financial instruments when required. Orbeo is the partner of choice for both buyers and sellers of CO2 instruments.

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