A pioneer of carbon energy in the 1990s has bought back a leading firm, which he created in 1997, after selling it for $220 million in 2009.
Brazilian Pedro Moura Costa and partner Pablo Martinez are set to buy back the EcoSecurities, a low-carbon projects' developer, from Swiss trader Mercuria Energy Group for an undisclosed sum.
EcoSecurities was started by Moura Costa in 1997, some months before the approval of the Kyoto Protocol by the United Nations Convention on Climate Change (UNFCCC).
The protocol triggered the development of carbon markets since countries could use carbon credits to help them to comply. The policies included emission reduction targets for developed countries.
In 2005, EcoSecurities was listed on the London Stock Exchange and raised enough capital to open offices in several countries, becoming the largest developer of low-carbon projects entitled to issue carbon credits.
JP Morgan bought the company for $220 million in 2009 and delisted EcoSecurities. In 2013, the US bank delisted the firm and sold it to Mercuria.
The move reflects apparently brighter prospects for the global carbon trading market, which has struggled over the past decade but is now seeing a revival as developing economies and high-emitting industries sign up to reduction targets.
“[The purchase was] strategic — we can see a surge in demand coming our way and we want to be ready to react to that,” Costa told the Financial Times. “We’ll play into the existing markets and will make ourselves ready for the ones that are arriving.”
Initiatives on the horizon include the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia), which will require airlines to buy credits to offset carbon dioxide emissions in excess of stipulated targets.
The first phase of Corsia will begin in 2021, and rules on eligible carbon credits are set to be announced next month at a UN climate change conference in Madrid.
Pablo Martinez, who used to coordinate carbon trading at Mercuria, decided to join Moura Costa in the deal. He will be the new CEO of EcoSecurities, with headquarters in Geneva.