NYMEX to absorb GreenX emissions contracts on Aug 25
Author: Michael Szabo
NYMEX, the U.S. energy exchange owned by market operator CME Group, will take over GreenX's emissions contracts and open interest on August 25, a move that could increase the participants and up competition in the growing global emissions market.
CME in April acquired a 100 percent stake in GreenX after having co-founded the emissions bourse in 2008 along with banks including Goldman Sachs and Morgan Stanley, and brokers such as Evolution Markets and ICAP.
Some 119 million tonnes of open interest in GreenX's CO2 futures and options contracts will be migrated over to NYMEX's platform, as well as the bourse's other emissions contracts including those covering the U.S. SOx and NOx market.
The number of firms clearing emissions trades will also increase to nearly 50 from GreenX's current 16.
Market participants said the migration is expected to also significantly boost trader access to the bourse's emissions contracts, as well as the number of firms acting as market maker.
This in turn could increase liquidity and dent rival ICE Futures Europe's 90 percent share of carbon trade in Europe, home of the world's largest cap-and-trade scheme.
CME would not estimate the level of participation expected in NYMEX's new suite of emissions contracts, but confirmed that trading and clearing fees would remain unchanged at $3 per 1,000 tonnes.
GreenX in July saw liquidity return after a trading drought following its acquisition by CME, handing 45 million tonnes or some 5.5 percent of all European volume last month.
(Reporting by Michael Szabo)