Carbon Spread Options

Carbon Spread

Our Company​

Gemini Structured Carbon

Gemini is a boutique group specializing in structured products and emissions-focused project advisory and investment. Gemini views renewable energy markets as an area of significant growth, and is using its expertise to increase its presence in these fields.

Since its formation in 2005, Gemini Structured Carbon Ltd (Gemini) has recognized the growing potential for project origination in environmental finance.

Gemini Structured Carbon Ltd. has a well-established reputation for providing advice, research and consulting services on carbon, select Greenhouse Gas reduction and renewable energy projects.

Our service offering includes:

  • Project Evaluation and Modelling
  • Project Initiation
  • Project Registration, Validation and Verification
  • CDM Project Management

Our Achievements:

  • Lead Carbon Advisor for the development of the Scaw Metals CDM project for AngloAmerican PLC in South Africa.
  • Lead Carbon Advisor for the development of the New Denmark Mine CDM project for AngloAmerican PLC in South Africa.
  • Lead Carbon Advisor to NT Energy Coal Bed Methane Project in South Africa in a Joint Venture with the South African Government.
  • Lead Carbon Advisor and equity holder in AfricaGeotherm Ltd and Namib Geopower, advancing opportunities in Solar and Geothermal power in South Africa and Namibia.
  • Concluded a Joint Venture with AFG Venture Group in Australia and Asia.
  • Concluded a Joint Venture in Russia and the former Soviet Republics.
  • The Gemini Group is also focussing on many renewable energy opportunities, including actively pursuing solar opportunities in France, Namibia, South Africa, Australia, and in California in the United States of America.

Carbon Spread Options

Lance Coogan, Gemini Structured Carbon

Going long an EUA/CER Spread Call Option is a very similar trade to going long an EUA call and going long a CER Put although it is significantly cheaper to buy the Spread call option. Therefore buying a spread call option and write an EUA Call and a CER Put takes advantage of this premium differential.

Suggested Strategy

Buy Dec12 3 Strike EUA / CER Spread Call Option €5.50
Write Dec12 15 Strike EUA Call Option €5.65
Write Dec12 12 Strike CER Put Option €4.46

Market Assumptions

Dec12 EUAs €15.50
Dec12 CERs €12.50
Cost of CER origination €8


Scenario 1: Implement Strategy With No Underlying Position

Scenario 2: Implement Strategy Whilst Long Primary Cers