Sydney, Australia – Rothschild Australia and E3 International are set to become key players in the international carbon credit trading market, an emerging commodity market that analysts estimate could be worth up to US$150 billion by 2012.
In a move that will re-shape the fledgling emissions trading market, Rothschild Australia and E3 International today announced their intention to launch the Carbon Ring Consortium — an investment vehicle that will provide companies in the Asia Pacific Region with an innovative way of learning about and understanding their risks in the new carbon market.
The Carbon Ring Consortium is the first of its kind in the Asia-Pacific Region, and is the first in a series of private investment vehicles that Carbon Ring Pty Ltd will launch in coming years.
Richard Martin, the chief executive officer of Rothschild Australia said, “With recent developments in international climate change policy, the question is no longer if, but when the global carbon trading market will emerge. Rothschild Australia, through Carbon Ring, intends to be at the forefront of this market, providing private investment vehicles to companies seeking to offset their greenhouse gas emissions liabilities.”
The Carbon Ring Consortium allows companies with a future carbon liability to purchase a range of carbon credits and obtain a practical insight into the operation of this new market. Carbon credits will be bought from domestic and international projects that achieve a reduction in greenhouse gas emissions. These carbon credits will be distributed pro rata to Consortium investors.
“The Carbon Ring Consortium is an important first step for Rothschild and for our clients,” said Mr. Martin.
“The Consortium should appeal to companies that are faced with a greenhouse liability and are significant users or producers of energy, such as electricity generators, heavy industrials, oil companies, major manufacturers or airlines, amongst many others.
“It provides investors with an opportunity to learn about the market through an investment in a low risk, low cost investment vehicle, created specifically to acquire a diverse range of carbon credits. Participants will also share in significant knowledge and intellectual property,” Mr. Martin said.
During its life, the Carbon Ring Consortium intends to purchase a range of carbon credits, in a range of jurisdictions and from a range of sources. In the process, the Consortium will expose investors to many of the most pressing issues that corporations will have to address if they are to participate in the emerging carbon market. It will also give investors a practical insight into the buying and selling of carbon credits in the present market, without the need to invest in significant trading infrastructure or to assume undue risk.
Mr. Martin believes that there are many reasons why an organisation would invest in the Consortium: gaining practical experience in an emerging market; offsetting their greenhouse gas emissions; hedging their investments in new infrastructure; or in response to the expectations of the public, customers or shareholders.
Craig Windram, the director of E3 International and a partner in Carbon Ring, said, “A carbon liability brings with it considerable financial risk for organisations, and early planning to deal with this risk will add to an organisation’s competitive advantage — that’s where Carbon Ring comes in.
“Few companies have developed a practical understanding of the emerging carbon market. For companies on either side of the equation, as either buyers or sellers, the Carbon Ring Consortium will provide the opportunity to ‘learn by doing’. This experience will be vital in assisting businesses to formulate policy, to understand and identify their risks, and to demonstrate leadership in an area of growing public concern,” Mr. Windram said.
The Carbon Ring Consortium is an unregistered, managed investment scheme. Designed to be a tailored, limited-life vehicle, it will document the legal and accounting process involved in the purchase, settlement and distribution of various carbon credit assets.
Requiring an investment of US$100,000, with a portion returned to investors in the form of carbon credits, the Consortium is intended to provide investors with a low cost, low risk and structured entry into this new market.
- About Rothschild
N M Rothschild & Sons has been at the centre of the world’s financial markets for more 200 years. Today, the firm is a global investment bank, which provides independent and quality advice to governments, corporations and individuals worldwide through a network of professionals in 40 offices across more than 30 countries. The firm employs 2,500 employees worldwide.
- About E3
The E3 Group is a hybrid organisation dedicated to making the business case for sustainable development. It is part strategic management consultancy, part environmental think tank, part project developer and part investment manager.
The E3 Group comprises a number of companies that have developed around the business of sustainability. The Group includes a conventional consulting business, an environmental software company, a dedicated renewable energy project promoter and the Carbon Ring Consortium. The principal operating company in the group is E3 International Pty Limited, which is headquartered in Australia.