Eurex to offer emissions trading through EEX hook-up

Eurex to offer emissions trading through EEX hook-up

Derivatives exchange Eurex is to begin offering trading in emissions rights through a collaboration with the European Energy Exchange.

Under the agreement, Eurex participants will be able to trade EEX CO2 products via their existing infrastructure connections, creating a marketplace which takes the trading, clearing and settlement standards of the financial markets into account.

The combined service will reach more than 600 member trading firms and will offer European Union Allowance (EUA) futures and Certified Emmission Reductios (CER) contracts as well as EUA spot contracts and options on EUA futures

E.ON Sales & Trading, Fortis Bank Global Markets and RWE Trading have already joined as market makers which will place buy and sell orders in the system on a daily base. Additional market makers are expected to join for the platform launch in early December.

The clearing houses of the two exchanges, European Commodity Clearing (ECC) and Eurex Clearing, will also cooperate in settling transactions and in the provision of risk management and collateral pledging.

Peter Reitz, Eurex executive board member responsible for product and market development, says emissions trading is a global product with major growth potential: "Through our cooperation, we are combining our respective strengths and bringing the European energy industry and the leading players on the international financial markets together on one platform."

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