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.

New York Funds '05 NOx Allowances New York this month funded vintage 2005 NOx emission allowance accounts for its sources. This is nice news, as such funding provides liquidity and certainty. It's Hot Out There Sellers’ prayers were answered, in part, by this month’s heat and humidity. While prices were still impacted by other factors (and thus did not trend dramatically upward), volumes of NOx allowances purchased were up, and covering of shorts was occurring this month. SO2 experienced a bit of related activity, until a price standoff recently ensued (see below). What's Up In Illinois? Illinois has expressed its continued dismay with U.S. EPA’s (US EPA) explanation of the “growth factors” used in the NOx SIP Call. In fact, Illinois has gone so far as to say that it may sue US EPA. Such a suit could jeopardize implementation of the NOx SIP call in 2004 in Illinois, and possibly the balance of the Midwest states. This would be quite an unfortunate outcome, as numerous sources in the Midwest have undertaken to install significant, costly, emissions control equipment. Cost recovery and/or emissions decreases would likely be impacted if NOx SIP Call implementation is further delayed in Illinois and/or other Midwest states. SO2 Prices Find a New Bottom and Recover Continuing a rather volatile trend, SO2 emission allowances dipped into the $130s/ton-range, before recovering and settling out in the $140s/ton-range. Lots of buyers appeared as the prices slid into the $130s, thus causing the return upward in price. At this point, sellers are holding out for the $150s/ton and the buyers are looking for the $130s/ton. This standoff has caused limited volumes of SO2 to trade in the $140s over the past several days. Correction In last month’s MPI, we provided some information regarding Maryland’s plan for NOx allowances. After speaking with the Maryland Department of the Environment, this information is now null and void. A new regulation will be coming out within the next few weeks, but the Maryland Department of the Environment is not permitted to comment on it’s content.

Greenhouse Gas Reductions Portfolio: 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 or 800-228-2955 ext. 10. www.co2e.com