no one claiming the first futures trade?
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ECX's First Emission Reduction Unit Offset Trades at Discount
2010-11-08 14:58:18.702 GMT
By Mathew Carr
Nov. 8 (Bloomberg) -- The European Climate Exchange handled
its first Emission Reduction Unit futures contract, a step that
widens the compliance options for factories and power stations
in the world's biggest carbon market.
Ten thousand metric tons of Emission Reduction Units, or
ERUs, for settlement in December traded at 12.20 euros ($17.06)
a ton in London at 9:54 a.m., compared with 12.26 euros a ton
for a comparable Certified Emission Reduction, or CER, credit
that traded a minute earlier, according to data today from the
exchange.
ERUs stem from the 1997 Kyoto Agreement's Joint
Implementation program to create incentives for emission-
reduction projects in developed nations, including Russia and
the former-Soviet states. CERs, on the other hand, are created
in developing nations under the Clean Development Mechanism, the
world's largest offset program. Manufacturers and utilities can
use both types of credit to comply with emissions limits in the
European CO2 market, the world's largest.
ERUs currently trade at a discount to CERs because fewer
companies have obtained internal management approval to buy
them, said Andrew Ager, the London head of carbon and emissions
at Prudential Financial Inc.'s Bache Commodities Ltd. The
discount should diminish over time as Emission Reduction Units
become more widely used, he said today by phone.
There are about 215 Joint Implementation projects and 6,828
under the Clean Development Mechanism, according to a UN website
and Bloomberg data.
Credit Suisse Group AG and RNK Capital LLC also traded the
first Emission Reduction Unit option on the European Climate
Exchange in London, in a transaction brokered by Tullett Prebon
Plc, London-based Tullett said today in an e-mail.
In a separate deal, Credit Suisse sold 100,000 tons of
December ERU futures to Gas Natural SDG SA for an unspecified
price at 1:21 p.m., said Evan Ard, a spokesman at Evolution
Markets Inc. Evolution brokered the ERU-for-CER swap, he said
today by phone.
For Related News and Information:
For New Energy Finance Model, Weekly Research CARX <GO>
Top Power Stories: PTOP <GO>
Emissions-trading stories: NI ENVMARKET BN <GO>
Today's top energy news: ETOP <GO>
European power-markets home page: EPWR <GO>
--Editors: Bruce Stanley, Raj Rajendran
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
