New limits being imposed on carbon emissions by Brussels in 2013 are likely to increase liabilities and impact negatively on the earnings of western European power generators next year.
That’s one of the chief findings from a report produced by Standard & Poor’s Ratings Services this week.
The report entitled Europe’s Tightening CO2 Emission Rules Add Costs And Uncertainties For Utilities” states that utilities will suffer when the third phase of the EU Emissions Trading System comes into effect in the new year.
“We believe the utility sector will be the hardest hit among carbon-intensive industries that are subject to Phase III of the EU ETS system,” said Standard & Poor’s credit analyst Michael Wilkins. “But we think the impact on credit quality associated with carbon exposure under Phase III will vary markedly between high and low emitters of CO2.
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