Lehman Brothers, the global investment bank, will commence trading physical Certified Emission Reductions (CERs) in Japan.
Lehman Brothers is the only global investment bank which can link the Japanese and European carbon markets, providing liquidity on both sides of the European and Asian carbon markets.
As part of the process, Lehman Brothers has become the first foreign financial firm to open an account in Japans National Registry System, upon approval by the Ministry of Environment and the Ministry of Economy, Trade and Industry. The National Registry System was developed in2002 to help the Japanese government establish its domestic rules of emission trading systems, including CERs.
A CER is a carbon credit developed by carbon offset providers that is certified as being equivalent to one ton of CO2 under the United Nations Clean Development Mechanism, as defined by the Kyoto Protocol. Carbon offset schemes allow emitters of greenhouse gases to pay another party toundertake to remove the equivalent amount of CO2 from the atmosphere, through activities including renewable energy, energy efficiency and carbon capture projects, typically where it is more economical to do so.
“We are delighted that the Japanese authorities have recognised our capabilities in this area. Lehman Brothers has joined a select list of leading Japanese trading houses and companies with the ability to trade physical CERs in Japan,” says Arun Murthy, Singapore-based head of Commodities Trading, Asia-Pacific, Lehman Brothers.
Lehman Brothers has significantly increased its global reach in the international carbon markets in the past 18 months, by developing origination capabilities in China, India and Latin America supported by the carbon trading desk in London. The firm is now delivering to its clients worldwide coverage of an increasingly important market.
“The global carbon market is rapidly taking shape as national markets are developing and connecting through the global CER market. With the granting of this license, Lehman Brothers now provides our clients with the most comprehensive carbon risk management capability available today,” says Laurent Segalen, global head of Carbon Emissions in London.
Lehman Brothers global carbon trading operations are led out of London and are part of the Global Commodities Business which also encompasses oil, coal, natural gas, power, metals and structured investor products.
The firm offers a comprehensive range of products and services across theCarbon Emissions Credits markets, including sourcing and origination of CER, trading and structuring of CER related products, and risk management advisory.