Yesterday, European Energy Exchange AG (EEX) and the international derivatives exchange Eurex started their cooperation in emissions trading. As of 5 December 2007, Eurex participants get direct access to the EEX order book if they have been admitted by EEX for trading emission allowance products. Admitted Eurex members simply use their existing infrastructure. The cooperation has the potential to create the largest international network for emissions trading, in which the two partners address approximately 600 trading member firms from the energy sector and financial institutions.
7 new customers were connected for the launch on 5 December, meaning that a total of 104 clients are now admitted to trading EU allowance (EUA) futures on EEX. The first day of trading recorded a total of 130,000 EUA. Further participants and market makers, particularly from the US, are currently being connected.
To start with, the EUA futures already listed on EEX will be available for trading on the joint platform. E.ON Sales & Trading, Fortis Bank Global Markets and RWE Trading act as market makers that will place buy and sell orders in the system on a daily basis, thereby ensuring basic liquidity.
New trading hours for emissions trading have also been introduced on 5 December. The emission allowances available on the EEX derivatives market are tradable from 8:30 a.m. until 5:00 p.m. CET and can also be registered as OTC transactions until 6:00 p.m. CET. In order to promote trading, EEX has reduced its trading fee for exchange transactions in emission products to €0.001/tonnes CO2. The exchange also charges a fee of €0.001/tonnes CO2 for the registration of OTC transactions. This price reduction is valid until the end of March 2008.
The clearing houses of the two exchanges, European Commodity Clearing AG (ECC) and Eurex Clearing AG, will cooperate in settling transactions to offer participants efficient and flexible clearing. Participants can also continue to use their existing clearing relationships.
Currently, 12 ECC clearing members and 11 clearing members of Eurex Clearing AG offer clearing services for CO2 products. ECC organises the physical delivery of emission allowances.
About EEX
EEX operates spot and derivatives markets for energy products. With currently 187 trading member firms from 20 countries, this energy exchange boasts the largest number of participants and the highest turnover in continental Europe. While coal is only quoted on the derivatives market, electricity, natural gas and EU emission allowances are traded both short-term on the spot market as well as long-term on the derivatives market for up to six years into the future. Clearing of exchange and over-the-counter transactions (OTC Clearing) will be provided by European Commodity Clearing AG (ECC). ECC is both the clearing house and a subsidiary of EEX.
About Eurex
Eurex, a subsidiary of Deutsche Börse AG and SWX Swiss Exchange, is one of the world’s leading derivatives exchanges. Eurex offers a wide range of international benchmark products and operates the most liquid market in the world for derivates on interest products. Moreover, Eurex is the leading stock exchange for trading in European equity options, offering 500 single stock futures. Eurex has an integrated clearing house in the form of Eurex Clearing AG.
