(BN) EEX Sets CO2 Trading Expansion as Priority; Seeks Market Makers


EEX Sets CO2 Trading Expansion as Priority; Seeks Market Makers
2010-11-24 13:53:29.842 GMT

By Ewa Krukowska
Nov. 24 (Bloomberg) -- The European Energy Exchange said
expanding its reach in carbon-dioxide trading is a priority as
the European Union moves toward auctioning permits in the
world's biggest such market.
EEX, based in Leipzig, Germany, is continental Europe's
largest energy exchange for emission rights, power, natural gas
and coal. The platform started handling carbon sales for
Germany's Environment Ministry this year and is preparing to
take part in a tender to become an operator for the planned EU
auctions in 2013, Managing Director Oliver Maibaum said.
"Our top priority is to play a bigger role in the carbon
market," Maibaum said today in an interview at the EMART
conference in Amsterdam. "The volumes will be bigger after the
EU starts auctioning. This already attracts many players and the
feedback from our traders is that there's more potential."
The EU, which has given away the majority of allowances
since its emission-trading system started in 2005, will require
most emitters to buy their permits when its third phase starts
in 2013. The bloc will auction about 60 percent of the total in
the first year and increase the proportion in following years,
according to estimates from the European Commission.
The cap for CO2 discharges for 2013 has been set at 2.04
billion tons, valued at about 31 billion euros at today's price.
This limit includes aluminum and chemical makers that join the
program in the third phase. An adjustment is also planned for
airlines that will become part of the system from 2012.

'Highly Interested'

A regulation approved by the EU's 27 member states in July
laid the groundwork for the bloc to set up a carbon auctioning
platform in its cap-and-trade system from 2013. Member states
will also be able to apply for national platforms.
"We're highly interested in getting into the auctioning
process and we'll probably apply for all," Maibaum said. "We
expect the tender for the common platform to attract around five
players, including us and probably other European exchanges."
The biggest exchange that trades EU carbon is the London-
based European Climate Exchange and smaller competitors include
BlueNext in Paris and Climex in the Netherlands.
Maibaum said the EEX was looking for more market makers to
boost liquidity from its current four in each gas and power
trading and two for carbon.
"We're in negotiations with a few clients," he said,
declining to give details. "We'd like to have more market
makers for all markets, especially for carbon."
The exchange plans to add time spreads for EU carbon
allowances to its current offer of spot and futures.
"We are thinking about 2011 versus 2012, 2012 versus 2013
and 2011 versus 2013," he said. "It wouldn't make sense to
bring them to the market later than in the first half of next

For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>

--Editors: Jonas Bergman, Mike Anderson

To contact the reporter on this story:
Ewa Krukowska in Amsterdam at +32-2-237-4331 or

To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net