The UK oil company BP has joined the ranks of Wall Street banks and registered as a US derivatives dealer as new rules written to avert a repeat of the global financial crisis penetrate energy markets. Companies dealing $8 billion or more swaps in a year must register, subjecting themselves to minimum capital and margin levels, business conduct standards and new reporting strictures. Houston-based subsidiary BP Energy joined the US swap dealer registry yesterday, following Cargill as the second commodity-orientated company on the list. The energy derivative market developed after the new dealer rules took effect in October 2012. (FT*)
Policy
UK companies facing mandatory energy efficiency audits under Government proposals
This week the UK Government has published proposals which will require all large companies in the UK to undertake mandatory energy efficiency assessments. According to the proposals, the Energy Savings Opportunity Scheme (ESOS) will enable companies to identify opportunities to save money on energy bills through improved energy efficiency and could benefit the UK by £1.9 billion. The scheme, which is now open for public consultation, is seen by the Government as a strategy for meeting the requirements of Article 8 of the EU Energy Efficiency Directive. Under the proposals, all large UK enterprises will be required to conduct energy efficiency audits by December 2015 and every four years thereafter. The manufacturers’ association EEF stated that UK manufacturers have reduced their emissions by nearly 40 percent over the last 20 years and warned that it would be unfair to burden energy-intensive sectors with restrictive targets. (Edie News)
Technology and Innovation
General Motors cuts energy costs by 80 percent through LED upgrade
The US car manufacturer General Motors (GM) is reducing energy costs by 80 percent, saving $780,000 a year, in what is said to be the world’s largest LED upgrade. GM is retrofitting its 815,000 square foot stamping plant in Ohio. The project, led by ALLED Lighting Systems, is reported to involve over 2000 fixtures in total. The upgrade also contains a wireless energy management system called ALLink to further reduce costs. (Eco-Business)
Supply Chain and Consumers
Brighter outlook for Primark sales after factory collapse
Primark’s sales have increased by 24 percent in the first half, despite consumer protests following the collapse of the factory in Bangladesh, which involved some of Primark’s suppliers, despite predictions that many consumers would no longer buy “cheap fashion”. More than 1,100 people died when the factory collapsed in April 2013. Associated British Foods (ABF), which owns Primark, has paid short-term financial compensation to more than 3,300 factory workers who worked in the building, irrespective of their employer. Additionally, Primark is offering long-term compensation to victims and their families who worked directly for its supplier in the Bangladeshi factory. (FT* and The Independent)
Environment
London needs emergency action to tackle air pollution, Mayor is told
Boris Johnson, the Mayor of London, wants to create the world’s first ultra-low emissions zone in 2020, when all petrol and diesel cars, buses, taxis and lorries would be barred from entering Central London during office hours. Transport for London has launched a feasibility study for introducing the ban on all but zero or low-emission vehicles, but members of the London Assembly said that action was needed now to reduce air pollution levels. The mayor hopes that the study will encourage manufacturers to develop more electric and hybrid vehicles, including taxis. However a study from KPMG found that one in three car companies would continue to focus on developing internal combustion engines. (The Times*)
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