Cases & Deals

Rhodia implements Clean Development Mechanisms defined by Kyoto Protocol

Clients Rhodia SA

Jones Day advised Rhodia with respect to its subsidiary Rhodia Energy Services' first initiatives to optimize the value of Carbon Emissions Receipts (CERs) generated from projects to reduce greenhouse gas emissions at plants in South Korea and Brazil, launched under the Kyoto Protocol's Clean Development Mechanism (CDM).

Rhodia Energy Services will create an equally-owned joint venture with Société Générale Energie, a wholly-owned subsidiary of Société Générale. The two partners will transfer all their emissions credits activities to the new company, which will sell the credits generated by Rhodia's projects in South Korea and Brazil. Société Générale Energie will provide its expertise and infrastructure to the new company.

Rhodia Energy Services has also formed a technical partnership with IXIS Environment & Infrastructures, a wholly-owned subsidiary of IXIS Corporate & Investment Bank. The goal is to leverage the partners' expertise to help manufacturers develop projects that generate emissions credits, as provided for in the Kyoto Protocol's flexibility mechanisms.

Rhodia Energy Services also has established the first stage of a hedging strategy involving the forward sale of 8 million tons of CERs, of which 6.5 million will be sold at a price of €15/ton to be spread equally over 2007 and 2008.

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