ABN Amro Becomes Latest Bank to Withdraw From Carbon Trading

Posted by Anton Murray Consulting on 18 Jun, 2014

Alessandro Vitelli 

ABN Amro Bank NV, the Dutch state-owned lender, withdrew from carbon trading, becoming the latest bank to exit the market after prices slumped.

ABN Amro closed its carbon desk after reviewing market activities and is working with clients to dispose of its portfolio of business, spokesman Arien Bikker said by phone today. The bank will continue to offer clearing services for carbon permits and offsets, he said. It has been active in the European Union emissions market since at least 2005.

“Carbon-trading activity is stopped,” Bikker said from Amsterdam. “Our results from market activity have been under pressure for a while.”

ABN Amro is exiting emissions trading after Barclays Plc, UBS AG, Deutsche Bank AG and JPMorgan Chase & Co. closed or reduced their carbon-trading businesses since 2008, the year that prices peaked. The market was worth $30 billion at the end of 2013, according to the World Bank.

Bikker declined to comment on the number of jobs that might be affected by the withdrawal from emissions trading. He said June 10 ABN Amro will cut about 100 jobs as it quits the equity-derivatives market and shuts its Asian markets business.

Prices for front-year EU carbon permits fell as much as 92 percent to a record 2.46 euros ($3.33) a metric ton on London’s ICE Futures Europe exchange in April 2013 after peaking at almost 30 euros in 2008. The contract advanced 3.2 percent to 5.57 euros as of 4:42 p.m. today (12 June).

Permits dropped after the world recession caused by the financial crisis curbed industrial production, in turn slashing demand for carbon allowances. That created a glut of the contracts exceeding 2.1 billion tons, equal to more than a year’s worth of discharges from the more than 11,000 factories and power stations covered by the system.

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