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 Certified Emission Reductions (CERs), global emission credits in accordance with the Kyoto Protocol, on the EEX. To incentivise trading, trading fees will be waived for the entire year 2008.
CERs are issued under the Kyoto Protocol for climate protection projects that industrialised 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.
“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,” says Maik Neubauer, member of the EEX AG executive board and responsible for the cooperation project.
“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,” adds Peter Reitz, Eurex executive board member and one of those responsible for the EEX cooperation.
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.
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.