Head of corporate & investor solutions at Commerzbank
How does Commerzbank support companies with risk management and emissions trading?
- Passive strategies: CO2 certificates are acquired shortly before the compliance reporting date, with sales made at the end of the year or quarter.
- Tactical/active trading approach: companies use the opportunities in the market and buy or sell emissions allowances as soon as a previously defined price target is reached.
- Hedging/purchasing strategies: in this approach, companies define strategies that set how certificates will be acquired or disposed of on a regular basis.
- Integrated risk management approach: commodity, exchange rate and interest rate risks are managed simultaneously.
- More strategically, it is about “make or buy”. Is it possible to reduce CO2 emissions? What is the cost of abatement? Is it cheaper to invest in low-carbon technologies than to purchase allowances?
- Refinancing: How EU emissions certificates that are allocated free of charge can be used in order to optimise financing costs.
Commerzbank is a pioneer in the area of emissions trading. We participated in the first auction of carbon certificates in Germany in 2001, concluded the first ISDA-documented EU allowance transaction in 2004 and the first EU aviation allowances transaction in 2011. With this experience, we are an ideal partner to support companies in carbon procurement and risk management.
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