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| Sourced From Environmental-finance.com |
London, 5 November: German energy giant RWE overstated its own carbon dioxide emissions by 70 million tonnes – equivalent to the annual greenhouse gas emissions of Denmark – in a report this year because of a classification mistake.
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EUAs might be undervalued, but the fact that their prices are far higher as compared to last year is adversely affecting the profits of power generators. The first phase of EU ETS (2005-07) contended with abysmally low EUA prices owing to excessive supply of free allowances. But now with the reining in of free EUAs in the second phase (2008-12), average price for the first 6 months has shot up to €24 for each ton of carbon.
RWE, the second biggest power generator in Germany has experienced an 8% fall in operating profits and 56.1% in net income during the first six months of 2008 as compared to last year. The shrinking profits are attributable to the drastic increase in carbon expenditure – the German unit of RWE had to shell out €583 mn for January-June 2008 as compared to €37 mn for the same period in 2007 and its UK division’s costs increased by €56 mn to €92 mn for the same time period.
It was earlier reported this month that the carbon cost of the Drax group that operates the largest coal plant in the UK has also gone up substantially, which in turn has slashed its profits by half as compared to last year.
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