News Releases

LONDON – Barclays Capital, the investment banking division of Barclays Bank PLC, is proud to announce that it has helped the market take another step towards commoditising carbon emissions, the world's newest commodity, by launching and trading a groundbreaking CER swap based on a reliable, publicly available price source.

"We’ve been trading EUA swaps for years but recently there has been a dramatic growth in spread trading between EUAs (EU Allowance)and CERs (Certified Emissions Reduction) as well as outright trading, this swap means that the market now has a financially settled product that facilitates exposure to both " said Louis Redshaw, Head of Environmental Markets.

"This is a tremendous development for the carbon markets because it opens up cash-settled opportunities in CER trading to the wider financial community that would normally not participate because of the physical delivery risks" added Carsten Hansen, Director, Commodity Hedge Fund Sales.

The swap works by settling against a chain of public sources of CER pricing information, depending on availability, that anticipates the launch of an exchange listed CER product but has the back-up of currently available price sources.  This provides a solution to the problem of settling a contract before reliable exchange or broker indices exist.  While the market generally expects those indices to be available in time for the first settlement of the contract [15 November 2008], in their absence a fall-back price source was needed, in this case Barclays Capital has picked the average of Point Carbon's Secondary Market CER assessment mid price and Reuters' CER index.

This new product from Barclays Capital comes on the back of a major investment in the emissions trading team – see Notes to Editors.

-ENDS-

For further information please contact:

Will Bowen, Barclays Capital Communications
+44 20 7773 3250
will.bowen@barcap.com

Notes to Editors

About Recent Hires to the Emissions trading team at Barclays Capital

In recent weeks Barclays Capital has hired six people into its Environmental Markets business, further underpinning its commitment to the rapidly developing emissions trading market.

Chris Leeds, previously Head of Environmental Markets at Merrill Lynch, joined as Head of Environmental Markets Sales, coordinating global carbon client interaction. 

The Global Chief Operating Officer of the Commodities business at Barclays Capital, Harshika Patel, has moved into a new position as Head of Environmental Markets Product and Business Development.  This new role is designed to ensure that the firm continues to offer its clients innovation in the carbon space as it continues to evolve.

Jan-Willem Martens, Michiel ten Hoopen, Vincent Helfferich and Michael Berends also join from Ecosecurities, with responsibility for accelerating the growth of our award winning CER (“Certified Emission Reduction”) origination and sales business.  They have many years of CDM (“Clean Development Mechanism”) market experience, in particular Jan-Willem and Michiel, who are members of the UNFCCC Methodology Panel and the Small-Scale Panel of the Executive Board, respectively.

About Emissions trading at Barclays Capital

As a leading provider of financial and commodity risk management solutions to industry, funds and investors, Barclays Capital has quickly established itself as an award-winning intermediary in the environmental markets by applying our banking experience in the following areas:

• Market access and intermediation: the provision of a “route to market” for participants looking to buy and sell allowances and project credits
• Risk management and structuring: the development of trading strategies and risk management products enabling market participants to manage the volume and price risks associated with their emissions portfolios
• Financing and investment: the provision of debt and equity finance for emission reduction projects and the provision of finance against emission allowance holdings
• Investor Solutions: Barclays Capital launched some of the first investment vehicles to meet the needs of investors’ growing appetite for exposure to Greenhouse Gas (GHG) prices

Barclays Capital has been recognised as a key player in the emissions trading market through various industry awards, including:

- Named Emissions Trading House of the Year– The Banker Investment Banking Awards (October 2007)

- Voted #1 in European Emissions Trading – Risk  Energy & Commodity rankings (Feb 2006 and March 2007)

- Voted #1 in CER Trading – Risk Energy & Commodity rankings (March 2007)

- Voted Best Trading Company – Point Carbon Carbon Market Awards (March 2006 and March 2007)

- Voted Best Trading Company, EU Emissions Trading Scheme – Environmental Finance magazine (December 2006)

- Named Pioneers in Emission Dealing – Energy Risk (December 2005)

About Barclays Capital
Barclays Capital is the investment banking division of Barclays Bank PLC which has an AA long-term credit rating and a balance sheet of over £1.1 trillion. With a distinctive business model, Barclays Capital provides large corporate, government and institutional clients with solutions to their financing and risk management needs.  Barclays Capital has offices in 26 countries, employs over 15,700 people and has the global reach and distribution power to meet the needs of issuers and investors worldwide.

For further information about Barclays Capital, please visit our website www.barclayscapital.com.