LONDON July 7, 2011 – Results of a study into the carbon liabilities of power companies under Phase III of the EU ETS undertaken by Standard & Poor’s, with carbon risk analytics firm RepuTex, indicate that firms that are not able to easily pass additional costs associated with carbon trading on to consumers are likely to face adverse credit rating impacts.
Carbon liabilities are likely to have the most significant effect on the EBITDA of Drax Power Ltd, RWE AG and E.ON AG, with future liabilities and credit impacts varying markedly between high and low emitters of CO2e.
RepuTex, the leading source of greenhouse gas emissions forecast information and a leader in the pricing of firm-level carbon liabilities, conducted an illustrative study for Standard & Poor’s to assess the future EBITDA exposure of a portfolio of European electric utilities by projecting emissions based on electricity demand modelling in key markets from 2011 to 2015. Analysis interpreted the financial liability those projected emissions under Phase III of the EU ETS under a range of carbon price and cost pass through scenarios.
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