A portion of Morgan Stanley’s emissions portfolio will be sold to Royal Dutch Shell as part of the oil major’s deal to buy the US investment bank’s European natural gas and power trading books, a source with knowledge of the transaction told Carbon Pulse.

Morgan Stanley has included some of its existing positions in the EU ETS in the deal, the source said, adding that the bank would remain active in the European carbon market.

The deal announced on Friday mainly includes Morgan Stanley’s physical and financial gas and power trades but no staff. No further details were available.

A spokesman for Morgan Stanley was unable to confirm if any of the bank’s emissions portfolio was included in the transaction, while a Shell spokeswoman had not yet responded to questions at the time of press.

Shell is looking to build its presence in European power and gas, while Morgan Stanley has followed other investment banks in exiting those markets.

Morgan Stanley is winding down its European power and gas trading desks, Bloomberg reported in May, in the wake of similar moves by rivals JP Morgan, Barclays and Deutsche Bank, spurred by increased regulation and lower profits.

By Mike Szabo – mike@carbon-pulse.com

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