The contracts, formally known as the ICE ECX CFI CER Futures Contract (ECX CER Futures) and the ICE ECX CFI CER Options Contract (ECX CER Options), will be launched jointly in September 2007.
The contracts use secondary CERs as the underlying units of trading, and will be listed and admitted to trading on the ICE Futures electronic platform. Users will be able to lock in prices for project-based contracts delivered at set dates in the future.
The exchange-traded nature of the contracts will allow users to secure transparent prices and reduce counterparty risk. All trades will be cleared by LCH.Clearnet. Subject to the ICE Futures Regulations, market participants will also be able to use the exchange for physical (EFP) and exchange for swap (EFS) mechanisms, to register OTC CER contracts for clearing by LCH.Clearnet.
Peter Koster, chief executive of ECX commented: “We are very pleased to offer ECX’s new CER products as an important addition to our EUA contracts. The introduction of exchange-traded CERs will be an important step in the development of a global carbon market.”
ECX and ICE Futures currently account for over 80% of the exchange-traded volume in the EU allowances (EUA) market.