European exchange trades 1bn tonnes of CO2

London, 12 July: More than 1 billion tonnes of carbon dioxide (CO2) have been traded on the European Climate Exchange (ECX) since its launch on 22 April 2005.

This included some 989 million tonnes (Mt) of futures contracts and 12.5Mt of options contracts, and represents an underlying market value of €18.3 billion ($25.2 billion), the ECX said on Tuesday.

Of the billion tonnes, 39% were screen trades directly through the exchange and 61% were cleared bilateral contracts or 'exchange for physicals', a clearing system for over-the-counter (OTC) trades made via brokers, which mitigates credit risk.

ECX chief executive Peter Koster said: "Europe is leading the international efforts to fight climate change. ECX is very pleased to be contributing with liquidity and transparency to the success of the European emissions market."

The figures put the ECX well ahead of other exchanges trading spot EUAs and futures and options contracts, but a significant tonnage is still traded on the OTC market.

Around 1.1 billion tonnes has been traded OTC since 22 April 2005, according to data compiled by the London Energy Brokers' Association (LEBA). This figure may slightly under-size the market, since LEBA only collects data for three vintages of EUA, for the current year and the two forward years, whereas carbon credits are traded out to 2012.

Meanwhile, daily OTC volumes recorded on LEBA beat the record high on Wednesday with 8.2Mt traded, while 2.3Mt went through the ECX screen on the same day. Much of this volume was due to spread trading between years and brokers reported a couple of big deals swapping EUAs for certified emission reductions – carbon credits awarded to emission reduction projects under the UN-monitored Clean Development Mechanism.

In the US, volumes have doubled on the ECX's sister exchange, the Chicago Climate Exchange (CCX). On 2 July, CCX announced 11.8 million tons of carbon dioxide had been traded in the first half of 2007, versus 10.2 million tons of carbon dioxide in all of 2006.