New daily record for EU carbon emission allowances futures

The market for European Union carbon dioxide emission allowances, operated jointly by the European Energy Exchange and derivatives exchange Eurex, saw a new daily record set with the trading of 301,000 EU allowance futures on January 18, bringing the total for the month to date to 2,081,000.

Since December 5 EEX and Eurex have offered their customers trading of carbon dioxide emission allowances, also known as EUA futures, via a joint platform. An additional 10 participants have been connected to the joint platform with a further eight in the process of licensing, bringing the total of number of participants licensed to trade EUA futures on EEX to 110.

Since the launch of co-operation between the two exchanges in December more than three million EUA futures have been traded, while market participants have benefited from a fall in average trading spreads from 9 to 5 euro cents.

'The increasing trade volumes show that our co-operation is generating its first successes,' says Peter Reitz, member of the managing board of Eurex.' The high degree of interest on the part of our trading participants, in particular from the US, confirms the attractiveness of the market for the trading participants from the financial market.'

Maik Neubauer, a member of the managing board at EEX, adds: 'The development of the spreads shows that we do not have to shrink from comparison with other markets.'

To promote trading, EEX has temporarily reduced the trading fee for exchange transactions in emission products and the charge for registration of OTC transactions on EEX to EUR 0.001 per tonne of carbon dioxide until the end of March.

EEX operates spot and derivatives markets for energy products and has 190 trading participants from 20 countries it. Coal is only quoted on the derivatives market, while power, natural gas and EU emission allowances are traded both short-term on the spot market and long-term on the derivatives market, with a time horizon of up to six years into the future.

Eurex, a subsidiary of Deutsche Börse and SWX Swiss Exchange, offers a range of Euro-zone interest rate and equity index benchmark derivatives, and has just completed a merger with the biggest equity options exchange in the world, the International Securities Exchange.

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