BlueNext has launched trading of its first spot emissions reduction units contracts using Trayport’s GlobalVision Exchange Trading System.
The launch of spot ERU trading comes on the back of two ERU auctions BlueNext held in January and September this year.
BlueNext trades three types of environmental contracts: EUAs, CERs and now ERUs. It has used Trayport’s GlobalVision Exchange Trading System since 2008.
BlueNext held the first-ever auction of 400,000 tons worth of ERUs in January. ERUs are created when companies invest in greenhouse gas reduction targets under the Kyoto Protocol.
“The exchange decided to implement secondary auctions and make spot contracts available to its members to improve trading activity and create price transparency for ERUs,” says François-Xavier Saint-Macary, chairman and chief executive, BlueNext. “By using Trayport to establish a secondary auction, with a link to our own in-house developed algorithm, we have made a major advance in providing price information and discovery for both buyers and sellers to make investments in the underlying joint implementation projects that will increase ERU supply.”
BlueNext’s spot members will now benefit from a single platform to trade the three contracts.
“Historically, the majority of ERU trades have been over-the-counter and so the auctions and spot contract availability of ERUs was designed by BlueNext and Trayport to help create better price discovery and generate a clearer price signal for ERUs to encourage greater investment,” says James Davies, head of sales and client services, Trayport.
