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Preliminary report: CARBON EXPO 2006: Unique business platform for the rapidly growing emissions market

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Source: Koelnmesse

- World's only trade fair and conference for emissions trading and the carbon market will take place in Cologne from 10th to 12th May 2006

- Overview and analysis of the latest trends in the global carbon market

- Conference: Increased emphasis on trade and the services sector

CARBON EXPO – Global Carbon Market Fair & Conference, which will be taking place for the third time from 10th to 12th May 2006, will be showcasing the expansion of market mechanisms for global climate protection. Both the Kyoto Protocol, and the EU-wide Emissions Trading Schemes, which were launched in early 2005, are examples of pioneering efforts to establish a long term market for carbon emissions trading. These initiatives are being complemented by voluntary measures of governments, multinational companies and industries aimed at making a contribution to protecting the climate. CARBON EXPO 2006 will demonstrate how energy-intensive companies can benefit from the emissions market in the long term within the existing economic and legal frameworks. The organizers — the World Bank, the International Emissions Trading Association (IETA) and Koelnmesse — expect that the event will attract around 150 exhibiting companies from over 50 countries to Cologne.

The Trade Fair

At CARBON EXPO, providers of technology; dealers, buyers and sellers of emission certificates; consultancy firms; service providers (for monitoring, verification etc.); project developers; companies and government representatives from developing countries will find a professional business platform on which they can present their products, technologies and services and establish new business relations.

In addition, the fair is an ideal forum for dialogue and the establishment of public-private partnerships. This is particularly relevant since municipal utilities and state-run power companies in many countries produce emissions that are subject to the EU Emissions Trading Directive.

This year’s fair will once again feature presentations by industrial companies, technology suppliers, consultants, banks, legal advisers, issuers of verification and accreditation for emissions, institutions, project developers, trading platforms, financial service providers, software suppliers and carbon funds projects and services for the emissions trading and carbon market.

As in the previous two years, the UNFCCC (United Nations Framework Convention on Climate Change) will exhibit at CARBON EXPO 2006 in order to provide information about the challenges connected with global climate change and the Kyoto Protocol.

The World Bank is supporting the participation of 25 developing countries and countries with economies in transition at CARBON EXPO 2006, including Bulgaria, Peru, Uganda, Chile, China, Russia, Ukraine, Uganda, Nicaragua, Costa Rica, El Salvador, Guatemala, Ecuador and South Africa. These countries will be presenting current CDM/JI projects and their respective national investment conditions.

The Kyoto Protocol has made developing countries attractive as locations for projects aimed at reducing emissions and as partners in the effort to protect the global climate. CARBON EXPO 2006 will be offering companies an outstanding opportunity to find out how and where they can acquire emission certificates by exporting emission-reducing technologies, thus generating additional income for their investment.

In addition, CARBON EXPO 2006 will focus on risk management alternatives associated with private investments in projects aimed at reducing greenhouse gas emissions in developing countries and emerging markets.

Only in Cologne can trade visitors find the entire range of products offered by the sector, as well as a comprehensive overview of the latest trends and developments. “One-stop shopping” is the name of the game, and it’s the key advantage CARBON EXPO 2006 offers to trade visitors from all over the world.

The Conference

The organizers of CARBON EXPO 2006 have further optimized the conference. The focus of this further development is a subdivision of the conference in line with specific visitor target groups. Accordingly, the conference has been subdivided into 'Trader Sessions', 'Service Sector Sessions' and 'CDM/JI Sectoral Sessions'. Market developments and activities have increasingly brought these areas to public attention. In addition, CARBON EXPO 2006 offers high-powered plenary sessions. As in previous years, they will provide a comprehensive review and detailed analysis of the latest developments in the global carbon markets, as well as insights into upcoming trends regarding volume and price structure. For the first time, the focus will also be on recent developments involving Joint Implementation (JI) and the Green Investment Schemes (GIS). Will the threshold countries be flooding the market with Emission Reduction Units (ERUs) and 'greened' Assigned Amount Units (AAUs)? And if so, what effects will this have on the market? This year, the status of the Clean Development Mechanism (CDM) will be concentrating on market-relevant topics, such as the price structure of the Certified Emission Reductions (CER) and the latest trends in the price differences between certificates from the CDM and allowances in the European Emissions Trading Schemes. In addition, the conference will be examining the extent to which the CDM reform is responding to the challenge and what effects it is having on the market supply.

The main issues to be considered in the specialist events, which have been tailored to address the needs of emissions traders, include the EU Emissions Trading Schemes (EU ETS), the price dynamics of the EU ETS, a comparison of the conditions for emissions trading and its market shares inside and outside the stock exchange, and a look at domestic trading schemes outside the European Union.

EU Emission Trading Schemes (EU ETS)

- Phase II National Allocation Plans (NAPs), review and analysis

- Implementation of the linking directive – What are the consequences?

- EU ETS review – What is the future of the EU ETS?

- Registries and (Community) International Transaction Log issues

- Is the EU ETS delivering – environmentally and on competitive pressures?

- Linking with other markets and sectors – What would be the market impact?

EU ETS Price Dynamics

- Phase II NAPs – Supply and demand characteristics in different sectors

- What sectors and countries are active, when will others come in?

- The impact of a cross-commodity structure – How are coal and gas

Driving the price of CO2, and what scenarios are evolving?

- What are the implications of the EU ETS on the price of electricity for

producers and consumers?

- Participation of market players from new EU countries – What is holding

them back?

- Are the industrials with a long position coming into the market and what

channles are they using?

Over-the-Counter vs. Exchange-Traded Market

- Market shares by instrument

- Innovative solutions

- What will drive survival in the consolidation of exchanges?

- Non-Annex 1 exchanges – What is their role in the market?

Domestic Trading Schemes

- Canadian supply and demand balance and market liquidity

- Potential supply of domestic carbon offsets in Canada

- US voluntary and government-level action

- Voluntary domestic trading in Japan

- Update on Australia

Special events dealing with the services sector will give trade visitors a deeper insight into the services on offer that make it possible for energy-intensive companies to engage in a smoothly functioning emissions trading process. The highlighted topics will include 'Monitoring and Verification of Emissions', 'Funds' and 'Financial Institutions'.

Monitoring and Verification

- Monitoring and reporting principles – What they are and what they mean

- Differences across Europe in the treatment of, e. g., uncertainty, accuracy and

materiality

- Challenges arising for international corporations

- How to create “high-quality” emission reductions through monitoring and

reporting

Funds

- Will funds deliver?

- What is the useful role of public sector funds?

- Hedge funds – What is their role?

Financial Institutions

- Roles of financial intermediaries

- Innovative financial solutions for the carbon market

- Risk management in carbon transactions

In addition, the fair and the conference will provide visitors with excellent opportunities to learn about the possibilities of investing in CDM/JI projects or gaining the necessary funding. Carbon finance leverages investments from the private and public sectors in projects aimed at the reduction of greenhouse gas emissions. This will reduce the effects of climate change and support sustainable development. That's why the programme section 'CDM/JI Sectoral Sessions' is specially designed to meet the needs of the target groups of sellers, buyers and technology suppliers, as well as the various energy-intensive industrial sectors. Accordingly, the focal issues for the target groups of sellers, buyers and technology suppliers are:

- What is the market potential for your technology and sector?

Which projects are eligible?

- How to avoid common pitfalls?

- How to address additionality?

- What baseline and monitoring methodologies exist?

- Projects ready for sale/investment;

- Real case studies of successful projects.

The questions cited above will be answered for the following sectors:

- Supply-side energy efficiency and fossil fuel switch;

- Demand-side energy efficiency and reduction of process-related emissions;

- Land use, land use change and forestry (LULUCF);

- Oil and Gas;

- Mining, mineral production and industrial non-CO2;

- Renewable Energy and bio-methane capture.

The conference is primarily targeted to

- 9,000 companies in the EU that are subject to the

Emissions Trading Directive, i.e. managers from the energy sector and the

energy-intensive industries (the areas of corporate development,

environmental management, technology, finances and law)

- Managers from banks, stock exchanges, brokerage firms, insurance companies,

associations, corporate consulting companies and law firms

- Suppliers of emission certificates

- Engineering firms and technical-inspection associations

- Government representatives from developing and industrialized nations.

- Project developers for emission-reduction projects in developing countries

and emerging markets.

The Supporting Programme

The supporting programme of CARBON EXPO 2006 consists of informational and sales-oriented segments that offer considerable added value to exhibitors and trade visitors.

The individual programme elements are:

Knowledge Mart

Leading practitioners from the private and public sectors will be available for free one-on-one sessions to answer your questions. The topics covered will include: carbon asset creation and management, carbon portfolio management, carbon contracting and deal structuring, monitoring and reporting, and emissions trading.

Project Bulletin Board

CARBON EXPO 2006 will offer companies an opportunity to buy emission reductions from CDM and JI projects. Host countries and project developers exhibiting at CARBON EXPO will bring project idea notes and project design documents to the event that are ready for sale/negotiation. The majority will be pre-scanned for quality by an IETA/World Bank expert panel. In 2005 emission reduction purchase agreements for more than 100 projects were signed or reached advanced negotiations at CARBON EXPO.

Exhibitor Side Events

Exhibitors at CARBON EXPO 2006 will be able to hold their own workshops and seminars free of charge. For this purpose, each exhibitor will have a 60-minute time slot and a fully equipped presentation room featuring state-of-the-art audio and imaging technology.

Events for Industrial Associations

As was the case in 2005, numerous events organized by industrial associations will round off the programme.

Workshop for Journalists

As a result of the great response engendered in 2004 and 2005, CARBON EXPO will again, in cooperation with COM+, Alliance of Communicators for Sustainable Development, feature a workshop especially designed for journalists for both developing and industrialized countries to be conducted by the Reuters Foundation (10th May 2006).

Maximum Expertise

The partners of Koelnmesse combine the maximum expertise that is presently available in this field. The World Bank initiated the first fund for the reduction of greenhouse gases in developing countries and emerging markets. IETA is a non-profit organization that actively promotes the establishment of a worldwide market for greenhouse gases in order to help meet the challenges associated with climate change. It represents more than 120 leading international industrial companies, suppliers of technical-inspection services, brokerage firms and providers of financial and consulting services.

Interested companies and visitors can now register to participate in CARBON EXPO 2006. For information about participating in the trade fair and conference, as well as travel arrangements, accommodation, presentation packages for exhibitors and trade fair services available in Cologne, call the hotline on +49 (0)221/821 3097, fax +49 (0)221/821 3098, or e-mail carbonexpo@koelnmesse.de. Alternatively, visit the website at www.carbonexpo.com.

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