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European Energy Exchange AG (EEX) and the derivatives exchange Eurex are expanding their cooperation in CO2 trading. As of 26 March 2008, it will be possible to trade in futures on CERs (Certified Emission Reductions), global emission credits in accordance with the Kyoto Protocol, on the EEX. To incentivise trading, trading fees (exchange trading and OTC-registry) will be waived for the entire year 2008.
Certified Emission Reductions (CERs) are issued under the Kyoto Protocol for climate protection projects that industrialized nations carry out in developing countries. One CER is equivalent to one tonne of CO2 reduction. Since 2008,
CERs can be used in part for emissions reduction compliance under the EU Emissions Trading System. As a result, CERs – unlike the EU Allowances – are already a globally available “currency” to be transferred via the regional emissions trading systems in the future.
Maik Neubauer, member of the EEX AG Executive Board and responsible for the cooperation project there, said: “By introducing exchange-traded CER futures, we are contributing the trading systems currently under development in Europe, the US and Asia to move closer together, even if their architectures are still different.” Peter Reitz, Eurex Executive Board member and among others responsible for the EEX cooperation, emphasized: “This positions us in international trading with CO2 emission allowances. For our market participants, CER contracts will be a valuable complement to existing EUA futures.” Product enhancement will continue to drive marketplace growth.
As part of the cooperation, Eurex members have already had access to futures on EUA (EU Allowances) listed on the EEX since 5 December 2007. Since the launch of the cooperation, volumes have strongly increased: in January 2008, around 4.1 million EUA were traded, compared with 250,000 EUA in January 2007. Compared with the previous month December, volumes tripled (December 2007: 1.4 million EUA).
EEX and Eurex will continuously expand their product range in emissions trading. The next step will be the launch of options on EUA futures in the second quarter of 2008.
About EEX
EEX operates spot and derivatives markets for energy products. With currently more than 190 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
The international derivatives exchange Eurex, jointly owned and operated by Deutsche Börse AG and SWX Swiss Exchange, organizes markets globally. Eurex is home to the Euro zone interest rate and equity index benchmark derivatives.
Eurex’s portfolio of markets includes International Securities Exchange, the world’s largest equity options exchange. The ECNs Eurex Repo and Eurex Bonds round out Eurex’s offering for repo and bond trading. In addition, Eurex provides an automated and integrated clearing house, Eurex Clearing AG. Eurex’s global liquidity network comprises more than 550 direct exchange members in 21 countries worldwide.
