As always Cantor Environmental Brokerage does not trade for its own account. All allowances purchased in the auction or traded in the open market are for our clients. It is Cantor Environmental Brokerage 's policy to keep the identity of our clients and their positions in the market in strict confidence.

SO2 Breaks Out Of Its Range. Throughout much of this month the SO2 EA price remained firmly range bound in the $170 - $175 range. The March 15 option expiry went by as a "nonevent", with many $165 and $170 puts and $180 calls going unexercised. Trading in options remained brisk throughout March. And with the market not sure of which direction the price would trend, we saw an even distribution of Calls, Puts and Straddles, as traders hedged against the eventual break out of the price range. That break came with just a few days to go until the EPA's annual SO2 Auction, with prices dropping to a low of $163/ton at the time of publication. Some traders feel that perhaps the auction won't be as heavily subscribed as the preceding couple of years and that the eventual clearing price may be lower than expected, hence the price decline. All eyes will now be looking to the Auction, the results of which will be announced at 10.30am CST on Tuesday March 26th. NOx Prices Slide. While current vintage NOx EAs have been mired in the $900s for quite a while, this month we saw vintage 2002 NOx EA prices falling as low as $825/ton. As fuel prices continue to rise and with hydroelectric power generation not looking very promising for this summer, this seeming paradox may reflect a decent buying opportunity. If we experience a hot summer in the Northeast and if fuel prices continue their trend, it is reasonable to expect demand for NOx allowances to rise. In other news, the EPA is expected to announce the Flow Control Ratio for 2002 as being 0.27. This would mean that every 100 tons of banked allowances used for compliance this year would be equivalent to 63 tons of current vintage allowances. This figure is not yet official, and we will confirm the EPA's announcement in next month's MPI.

Greenhouse Gas Reductions Portfolio: CO2e.com, Cantor Environmental Brokerage ' sister company, assists companies to hedge their greenhouse gas exposure and potential limitations on their ability to emit greenhouse gases. CO2e.com experts provide risk managers with options to create a diverse portfolio of greenhouse gas reductions and offsets. Transactions include simple purchases and sales to structured options transactions. CO2e.com currently represents a diverse family of reductions including: (a) Renewable energy, energy efficiency and land-use projects expected to be eligible for credit under the Clean Development Mechanism in South and Central America, Asia, and Africa; (b) Renewable energy, energy efficiency, methane capture and recovery, and land-use projects in Australia, Canada, and Europe; and (c) Renewable energy, land-use, and methane capture and recovery projects in the United States. Prices vary but range from $1.00 - $2.00 per ton CO2 equivalent and increase up to $8.00 depending on vintage year, risk guarantees, volume, and contract structure. Options prices are according to structure. For details call Corinne Boone at 416-350-2177.