Standard Chartered Opens Gas, Carbon Trading Desk as Prices Soar

(Bloomberg) -- Standard Chartered Plc opened a desk to trade natural gas and carbon following a record-breaking run for both commodities.

The so-called energy transition desk began operating last month, Standard Chartered said in an email. Prices for gas have soared on a lack of supply, with carbon permits following suit as utilities switch to cheaper -- but dirtier -- coal-fed power plants.

Head of Carbon Markets Development Chris Leeds will lead the energy transition business, according to the bank. Head of Energy Transition Trading Faraaz Mir will trade emissions and gas from London, with staff in the U.S. and Singapore, and report to Global Head of Commodity Trading Matthew Hastings.

Starting with a focus on gas markets in the U.S., U.K., Europe and Asia as well as European Union carbon, the London-based bank plans to expand the reach of its emissions trading in the future. Its chief executive officer, Bill Winters, is already chair of an industry taskforce looking to boost credit offsets.

The price of EU carbon has surged about 90% this year, driven initially by the bloc’s plans to accelerate emission cuts and subsequently by skyrocketing prices for gas.

The strong carbon market has already drawn hedge funds and commodity trading houses to start betting on the permits. European banks have been slower to react, but that may be changing, with Barclays Plc mulling a return to emissions trading after exiting the business almost a decade ago. 

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