Global Environmentals Newsletter | May 2020
Leipzig, London, 14 May 2020
Christian Fleischer appointed as Head of Sales Environmentals
In order to strengthen the focus on the further development of the environmental business, EEX has appointed Christian Fleischer as the new Head of Sales for the Environmentals business.
Christian began his career at EEX in 2008. Since 2011, he has contributed his expertise as part of the Sales team as a specialist for the Emissions market. On his new role, he comments:
“I am happy to shape the future of the environmentals business together with my colleagues with a close view on client and market demands”.
This new role will focus on broadening the product range in this segment with a stronger focus on customer benefits.
Carbon Community: Join our new LinkedIn group
Already today, the Carbon Community is spread around the whole world. Nevertheless, it is particularly important for us to be close to our customers. Only if we receive your feedback and work together, can we continue to deliver improvements and shape carbon markets worldwide. To facilitate the exchange with you and across the whole community, we have created the LinkedIn group "CarbonCommunity". This is one additional channel where we will provide you with all the information you need and keep you up to date with the latest market developments. But most importantly: We are looking for an active dialogue.
Nodal's Demetri Karousos talks record 2019 volumes and further product diversity for 2020
In 2019, Nodal and its partner IncubEx extended their offering for the North-American carbon market. This included new renewable energy certificate (REC) contracts and a new California Low Carbon Fuel Standard (LCFS) contract expanding the product list to 38 contracts, the largest listing of such contracts in the world. Altogether, the environmental suite of products topped 65,000 contracts in Q1 2020, a 220% increase year on year. To date, more than 80 different Nodal environmental contract codes have traded and more contracts in the renewable fuels and REC space are planned for launch soon.
For our Annual Report 2019, we interviewed Demetri Karousos from Nodal who outlines the developments in North America and its ongoing push to diversify and grow its product mix in North America.
EEX response to the consultation on a carbon border adjustment mechanism
EEX responded to the European Commission’s consultation on a roadmap for a directive on a carbon border adjustment mechanism.
EEX welcomes the Green Deal initiative as a pivotal step for Europe to achieve its ambitious 2030 and 2050 climate targets and assert its role as global climate action leader. Energy markets, and in particular power and emissions markets, will be a key instrument in delivering on Europe’s long-term climate ambitions.
With the Green Deal, Europe is setting out to intensify its efforts in global climate diplomacy.
We welcome this course as it can make a significant contribution to both increasing global climate action efforts and aligning them, thereby facilitating cooperation. Introduction of a carbon border adjustment mechanism, if well-designed, can be one element in a suite of different policy initiatives and actions contributing to this.
A possible carbon border adjustment mechanism should be as closely as possible integrated with the existing EU Emissions Trading Scheme. In its consultation response, EEX outlines key principles for such a mechanism should it be implemented.
Market Update: Volatility leads to upswing in volume
Although the global economic developments and the associated uncertainty led to an exceptionally high volatility combined in March and April, volumes in EEX Emissions Derivatives rose by around +12% year on year. The bearish sentiment caused the cancellation of one auction on 17 March. Despite a slightly lower participation and cover ratio in March & April compared to the previous months of 2020, all further auctions were successfully concluded with robust results. Moreover, the generally lower levels of trade registration volumes were compensated by excellent results on our trading screen with much better participation. In March we have seen an all-time high in active traders on screen, which is a great +50% jump year on year. By the way, in the last few months more than half of the emissions futures volumes stemmed from financial market players. All-in-all, EEX attracts more and more players to join trading in the order book as liquidity increased significantly over the last years.
The European Energy Exchange (EEX) is the leading energy exchange in Europe which develops, operates and connects secure, liquid and transparent markets for energy and related products. As part of EEX Group, a global commodity exchange, EEX offers contracts on power, gas and emission allowances as well as freight and agricultural products. EEX also provides registry services as well as auctions for Guarantees of Origin.
EEX is part of Deutsche Börse Group.
EEX and IncubEx jointly develop and expand global environmental and commodity markets. The IncubEx team has considerable experience in the derivatives industry with specific expertise in exchange-traded products and services.