Green Exchange posts 1-million tonne volume in CER pact

Written by Commodities Bureau | Mumbai, Apr 29 | Updated: Apr 30 2008, 06:16am hrs
The Green Exchange, on Tuesday, announced its opening-week volumes for the first ever exchange-traded options contracts for carbon offsets. During the trade week of April 21-25 , counterparties transacted 1,150 certified emissions reduction (CER) options contracts. One contract is the equivalent of 1,000 CERs (or 1,000 tonne of Co2-equivalent reductions), making the first-week volume total for the CER Option contract at 1.15 million tonne, an exchange release said. The Green Exchange, which launched trading on March 17, offers a comprehensive range of environmental contracts for markets focused on solutions to climate change, air pollution, and other environmental challenges. The exchange introduced the CER options contract for clearing on the NYMEX ClearPort and trading on the NYMEX trading floor beginning on April 20 for the trade date of April 21.

NYMEX president and chief executive officer and member of the Green Exchange executive committee, James E Newsome, said: The Green Exchange is committed to being a leader among environmental exchanges, and our successful launch of the first-ever options contract for carbon offsets has demonstrated this. An initial week of trading under the CER options contract of more than one-million tonne is a great start. There is a clear need in the carbon market for these types of risk management tools, and they are particularly well-suited to the global trading platform available on the Green Exchange.

The contract, with commodity code VG, is an European style option that expires three business days prior to the expiration of the underlying CER futures contract. The initial contract months are December 2008, March 2009, June 2009, September 2009, December 2009, March 2010, June 2010, September 2010, December 2010, December 2011, and December 2012. The exchange currently offers environmental futures and options contracts that include the EUs carbon allowance futures.