Exchanges merge to create spot market for carbon
LONDON (Reuters) - Two European carbon trading exchanges are merging their platforms to offer spot trading in European Union and United Nations credits, they said on Thursday.
Spot trading platforms New Values and euets.com, owned by Budapest-based Vertis Finance, will merge into a single electronic exchange, called Climex, where traders will be able to buy and sell EU Allowances (EUAs) and credits issued under the Kyoto Protocol (CERs and ERUs).
The platform, to begin trading on February 18, will be the first to offer spot trading of Kyoto credits, though other exchanges, including Climate Exchange's Climate Spot Exchange, are in the works.
"We can provide (CER and ERU) spot trading for operators looking for a cheaper way to comply in the EU Emissions Trading Scheme," Vertis CEO Barna Barath said in a statement.
Currently, EU member states participating in the bloc's emissions trading scheme are not permitted to take delivery of Kyoto credits, at least until a physical link between the EU's scheme and the UN platform is complete. Technical difficulties have delayed this connection indefinitely.
However, Climex members with an account at Switzerland's carbon trading registry can receive or deliver Kyoto credits in the interim.
Switzerland, not a member of the EU, is the only European country to have a connected registry, thereby allowing it to settle Kyoto credit trades.
National registries in Japan and New Zealand also have live links to the United Nations carbon trading system.
More than 116 million CERs have been issued by the UN's climate change secretariat to date, compared with only 756,000 ERUs.
According to the Reuters CER index, credits for delivery in December 2008 closed at 14.90 euros a tonne on Wednesday.
EUA credits for the same delivery trading under the EU's scheme closed at 19.93 euros a tonne Wednesday.
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(Reporting by Michael Szabo; Editing by Anthony Barker)