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At its meeting in Lucerne on 14 March which was chaired by Dr. Günther Rabensteiner, the Exchange Council of the European Energy Exchange (EEX) discussed EEX’s plans for the further development of trading in emission allowances. Upon the transition from the second to the third trading phase, the EU Emissions Trading System (EU ETS) will be extended to other industries, such as the aviation sector, on the one hand and, on the other hand, primary market auctions will significantly gain in importance as an allocation method.
With a view to the third trading period, EEX is planning new products: In the future, emission allowances for the aviation industry (EU Aviation Allowances – EUAA) will also be offered for trading. The Derivatives Market will be launched on 30 April and the Spot Market for EUAA will follow suit by the middle of the year. Furthermore, Futures on Emission Reduction Units (ERU) will be launched at the end of April. These are emission credits which are generated through emission-reducing projects in industrialised nations under the Kyoto Protocol (Joint Implementation Projects). As early as on 26 March, EEX will release the futures on Certified Emission Reductions (CER) for all maturities of the third trading period. As a result, all Derivatives Products on emission allowances will be tradable until the year 2020.
Moreover, EEX is realigning its technical systems: The Spot Market for Emission Allowances, which is still running on the Xetra trading system at the moment, is expected to be switched to the ComXerv trading system until the middle of the year. This step helps to consolidate the trading systems for the EEX Natural Gas and CO2 Spot Market. The Exchange Council adopted the amendments of the rules and regulations required for these initiatives.
The Exchange Council also welcomed that EEX has recently been awarded the contract for the transitional platform in Germany by the Federal Environment Agency as being very positive for EEX’s position in the tendering procedures of the auction platforms. In addition to the on-going EUA auctions for the second trading period, up to 85 million emission allowances of the third trading period will be auctioned off on the transitional platform of EEX on behalf of the German Federal Government.
As a further item on the agenda of the meeting, the Exchange Council discussed a concept developed by EEX which is designed to simplify the exchange trader training and enable experienced traders to access the market more quickly. In the future, the EEX Spot and Derivatives Market training will be combined into one training course and offered in two versions: The basic “EEX Exchange Trader” training course aims at participants that already have experience in trading. As has been the case so far, EEX will also offer the intensive trader training course (which is now referred to as the “EEX Exchange Trader Certificate Course”). This reorganisation and flexibilisation of training courses and trader examinations was expressly welcomed by the Exchange Council. Traders with prior experience are granted access more quickly and, at the same time, the uniform exchange trader examination ensures that all admitted traders have furnished proof of the required qualification.
In the context of the presentation of current regulatory and legal developments, the Exchange Council welcomed Johannes Mayer, head of the department of economics at the Austrian supervisory authority, E-Control, as a speaker. Mr Mayer presented the requirements for market participants arising from the EU Regulation on Energy Market Integrity and Transparency (REMIT) to the members of the Exchange Council. REMIT, in particular, establishes an obligation for all market participants to publish insider information. In the Exchange Council’s opinion, EEX has not only established an infrastructure which already fulfils a large number of the publication requirements provided for with the transparency platform, it also recommends itself for the publication of insider information on account of its market presence. Against this background,the members of the Exchange Council encouraged EEX to expand the existing platform to include further ad-hoc announcements and, thus, contribute to the implementation of the REMIT regulation.
The Exchange Council of EEX is an official body of the exchange under the German Exchange Act. It consists of in total 24 members who adequately represent the various interest groups and business circles: In addition to the trading participants with 19 elected members from various sectors (transmission system operators and power trading companies, municipal utilities and regional suppliers, brokers and financial service providers as well as commercial consumers), four representatives from associations and one investors’ representative are members. The tasks of the Exchange Council include, in particular, the adoption of the rules and regulations of the exchange and their amendments. In addition, its tasks comprise the appointment and supervision of the Management Board of the Exchange and the appointment of the head of the Market Surveillance.
