SG names new Orbeo emissions joint venture with Rhodia

Orbeo, a 50-50 joint venture between the two companies, starts with €10 million of capital. The company has exclusive access to Rhodia's supply of carbon credits, predicted to rise to between 11 and 13 million tonnes equivalent of carbon dioxide per year from next year. Trading will take place on SG's commodity trading floor.

Jérôme Malka, SG's head of business development and the managing director of the joint venture, said: "We will advertise ourselves as a market maker – having a good view of the flow of trade is very important to us."

The company also plans to offer carbon forwards to companies wishing to hedge their emission price risk, he added, saying that Orbeo would be able to provide guarantees of delivery, unlike other providers of carbon credits. If a company's emission control efforts fail, it would not be able to deliver the permits it had earned to a holder of carbon futures.

At present, Orbeo draws on four Rhodia emissions-reductions projects, in Brazil, France, South Korea and the UK. It plans to obtain carbon credits from other non-Rhodia projects and is negotiating with ‘around a dozen’ parties. No contracts have yet been signed, but two are expected to close by the end of the year, Malka said.