European utility: Carbon credit procurement strategy

The issue

Our client, a European utility, faced a shortfall of allowances under the newly established EU Emissions Trading Scheme. In response, they engaged PwC to consider what their procurement strategy should be in this emerging market, and how they should structure and resource the procurement function.

Our approach

We devised an emissions trading strategy for the client covering aspects such as: ensuring cost-effective compliance with the EU Emissions Trading Directive, impacts on investment planning, and approaches to carbon credit procurement relative to Joint Implementation and Clean Development Mechanisms and their own internal risk management requirements.

The outcome

Our advice helped the client rapidly climb a steep learning curve, factor carbon into important investment decisions, and select appropriate entry strategies for credit procurement.