Clearstream plans carbon trading settlement service

Clearstream plans carbon trading settlement service

Deutsche Börse's Clearstream is set to launch a settlement and custody service for carbon trading rights called Global Emissions Market Access (Gema).

From February, Gema will use the clearer's existing connectivity and applications by making carbon rights - European Union Allowances and Certified Emission Reductions - eligible in Clearstream Banking (Luxembourg).

This provides market participants with access to a new market without requiring any system developments or new back office processes, says the clearer. Identification codes for carbon rights will be allocated using industry recognised formats as for any other security eligible in Clearstream.

According to the World Bank, the volumes of traded carbon rights worldwide doubled to EUR86 billion in 2008, with the European Union Emissions Trading Scheme and the Clean Development Mechanisms currently accounting for the great majority of volumes.

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