At Danske Commodities, we are entrepreneurs at heart. We constantly challenge the status quo and keep our eyes open for new collaboration opportunities. This is why we have launched the Business Accelerator programme welcoming new commercial ideas into our business. Are you ready to accelerate?
Levy Exemption Certificates (LEC)
Mads Schmidt Christensen, Head of Strategy & Communications at Danske Commodities
In 2001, the UK introduced a climate change levy, imposing a tax on electricity or the option to acquire a so-called “Levy Exemption Certificate” (LEC) at a marginally lower price. In short, LECs were issued by the UK energy regulator, Ofgem, to renewable electricity producers across Europe and exported to the UK, where they were purchased as a proof of renewable origin of the energy.
To capture the value in this market, Danske Commodities incubated a team of external experts that could accredit renewable power producers. At the same time, dc used its in-house climate certificate trading desk to export and sell the accredited LECs at the highest possible price, thereby maximising the value for the producers and for Danske Commodities.
By combining internal and external capabilities, Danske Commodities gained a competitive advantage lasting from 2012 to 2015, where the UK government removed the LECs scheme. In this period, the LEC business was one of Danske Commodities’ most profitable business areas, and it remains one of the company's major successes in terms of innovating under changing market conditions.
For more information please contact Mads Schmidt Christensen.
Danske Commodities is an international trader of energy-related commodities. We move energy from where there’s more than needed to where it’s needed most.
Our core business has always been energy trading. We currently trade in 38 countries, specialising in renewable energy and emerging markets.
Trading activities are the engine of our business, while our trading capabilities enable us to offer a range of flexible, value-adding services.