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Utilities Will Feel The Squeeze As Europe Tightens Its Grip On CO2 Emissions In 2013 Jul 11
Standard & Poors, July 2011
Abstract
The third phase of the EU Emissions Trading System (EU ETS), which starts on Jan. 1, 2013, will impose significantly stricter environmental constraints on Europe's largest electric utilities than exist at present. What's more, believes Standard & Poor's Ratings Services, this could lead to deteriorating credit quality in certain exposed segments of the sector, notably power generation. With the key elements of EU ETS Phase III now agreed in law, the scheme will impose a cap on EU greenhouse gas (GHG) emissions and expand its coverage to encompass new industries such as aviation and aluminum and ammonia producers. The scheme will also move toward a regime where companies will have to buy the majority of EU carbon emissions allowances (EUAs)...
Companies mentioned in this report are: Electricite de France S.A.,Endesa S.A.,Vattenfall AB,SSE PLC,Iberdrola S.A.,E.ON AG,Centrica PLC,RWE AG,Enel SpA,Drax Power Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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