In order to further strengthen its role on this market, the European Energy Exchange (EEX) has fundamentally revised its offer on the Secondary Market for Emission Allowances.
To this end, EEX acquired a number of market partners that will quote on the Spot and Derivatives Market from 1 June 2015 and support liquidity in these markets. The new Market Makers are Axpo Trading AG and Belektron d.o.o., while CEZ a.s will operate as Liquidity Provider in addition.
EEX already adjusted its fee structure and introduced a so-called “initiator-aggressor model” in April. Under this model, the participant that initiates a transaction (“initiator”) is completely exempt from trading and clearing fees. Furthermore, fees are only charged for one leg of the spread in trading of price difference between the Spot Market and the Derivatives Markets (so-called Spot/Future Time Spread). In addition to this reduced fee, EEX offers a volume-based incentive system: Trading participants with a volume of more than 5 million tonnes within one month receive a 50-percent rebate on the trading and clearing fees.
Additionally, in April, EEX introduced various new products for emissions trading, including month and quarter maturities on the Derivatives Market for EU Allowances (EUA) and trading of price differences (spreads) between different maturities (e.g. Spot-Future) and products (EUA-CER, EUA-EUAA). All Spot and Derivatives Market products for emission allowances are available on a uniform trading system and can also be traded via the new EEX TT Screen. The TT Screen also enables access to further EEX markets, for example, the Power Derivatives Market.
“Axpo Trading AG welcomes the initiative of EEX to create attractive conditions for trading emission allowances on the secondary market. With our engagement as a Market Maker, we want to sustainably support this development and look forward to the cooperation”, says Alexander Stritzinger, Global Emissions and Certificates Trader at Axpo Trading AG.
“With these measures, we increase the attractiveness of our CO2 Secondary Market significantly”, explains Steffen Köhler, Chief Operating Officer of EEX. “Our participants benefit from tighter spreads, a competitive fee model and a comprehensive product portfolio which is now available via one trading system.”
Since the introduction of these new products, the volume on the Secondary Market has increased. In April 2015, a volume of 5.2 million tonnes of CO2 was traded on the Secondary Market compared with 2.1 million tonnes of CO2 in April 2014. In addition to trading on the secondary market, EEX runs large-scale primary market auctions of emission allowances on four days per week on its platform.
The European Energy Exchange (EEX) is the leading energy exchange in Europe. It develops, operates and connects secure, liquid and transparent markets for energy and commodities products. At EEX, contracts on Power, Coal and Emission Allowances as well as Freight and Agricultural Products are traded or registered for clearing. Alongside EEX, EPEX SPOT (incl. APX-Belpex), Powernext, Cleartrade Exchange (CLTX) and Gaspoint Nordic are also part of EEX Group. Clearing and settlement of trading transactions are provided by the clearing house European Commodity Clearing (ECC).
