IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today announced that ICE Futures Europe will introduce two new emissions allowance contracts in its capacity as the designated platform for hosting auctions under the EU Emissions Trading System on behalf of the UK Government’s Department of Energy and Climate Change (DECC).
ICE Futures Europe will introduce the EU Allowance (EUA) UK Auction Contract and the EU Aviation Allowance (EUAA) UK Auction Contract on November 21, 2012. The new UK Auction emissions products will be spot contracts and represent a lot size of 500 Phase III EUAs and EUAAs respectively.
The first UK Phase III EUA auctions are scheduled for Wednesday November 21 and Wednesday December 5, and EUAA auctions for Monday November 26 and Monday December 10, 2012, in each case between 8.00am and 10.00am UK time.
“Following successful auctions on behalf of the European Investment Bank, ICE is pleased to host the emissions auctions on behalf of the UK Government. The auctions will take place on the same platform on which ICE’s carbon markets operate and will expand the range of services we offer as Phase III of the EU Emissions Trading Scheme comes into effect,” said David Peniket, president & COO, ICE Futures Europe.
It is expected that 6.5 million EUAs will be auctioned on November 21 and 5.758 million EUAs on December 5, 2012. The EUAA auctions on November 26 and December 10, 2012 are each expected to consist of approximately 3.5 million aviation allowances. The auction calendar and auction volumes are subject to final approval by the European Commission.
Emissions futures volumes have experienced strong growth since the first contract was launched in 2005, with annual ICE emissions futures and options volumes achieving a record 7.57 million contracts in 2011 (7,570 million tonnes of CO2). Year to date volumes in 2012 for ICE emissions futures and options products are 6.99 million contracts, an increase of 15% on the same period last year. As at October 26, 2012, open interest was 1.91 million contracts.
ICE has developed an auction platform which is fully integrated with WebICE, ICE’s front-end trading platform. WebICE is widely recognised for its state-of-the-art functionality, which delivers flexibility, connectivity and reliability to participants across the globe. The ICE platform achieved greater than 99.998% availability and sub-millisecond transaction times during 2011.
ICE Futures Europe offers futures and options contracts on four types of carbon units: EU Allowances (EUAs),Certified Emission Reductions (CERs), Emissions Reductions Units (ERUs) and European Union Aviation Allowances (EUAAs).
