EEX to handle permit sales, auctions under new German carbon pricing scheme

Published 16:03 on March 25, 2021  /  Last updated at 18:08 on March 25, 2021  /  Carbon Taxes, EMEA, EU ETS  /  No Comments

German energy exchange EEX has been selected to handle the sales and auctions of emissions allowances under the country’s new domestic carbon pricing scheme.

German energy exchange EEX has been selected to handle the sales and auctions of emissions allowances under the country’s new domestic carbon pricing scheme.

The bourse was awarded the contract by the German Federal Environment Agency to handle the distribution of supply in the national ETS (nEHS), which covers the non-EU ETS sectors of transportation and buildings.

The programme came into force at the start of this year with a fixed permit price of €25/tonne of CO2e, which is set to rise to €55 by 2025 before the system transitions a year later to a trading setup with a price collar of €55-65.

Sellers of CO2-emitting fuels, in particular petrol, diesel, heating oil, liquefied petroleum gas, natural gas, and coal, are included in the nEHS and must purchase and surrender carbon allowances annually, with the first compliance deadline for calendar year 2021 set for Sep. 30, 2022.

Up to and including 2025, the sale of permits will take place via EEX at these fixed prices, the bourse said in a press release on Thursday.

This year’s sales will take place twice weekly between October and December, with the exact dates to be published at least six weeks in advance.

From this September, participants in the nEHS can apply to join EEX, though they can also purchase permits from authorised intermediaries.

Then from 2026, EEX will handle the auctions of the units as the programme shifts to a trading structure.

EEX currently hosts the EU ETS’ Common Auction Platform, handling the vast majority of carbon allowance auctions under the scheme.

It is also planning to introduce in the coming weeks new contracts for the UK’s new post-Brexit carbon market, EEX said Wednesday.

“With its strong expertise in operating and developing solutions for emissions markets, EEX plans to launch dedicated spot and derivatives products for the UK ETS in the course of the second quarter, subject to market readiness and regulatory approval,” it added.

The products will be similar to those under the EU ETS, “which will make it possible to connect the two markets (UK and EU) in the future, if politically decided.”

Rival bourse ICE Futures Europe is launching trade in UKA futures on May 19, as it hosts the first allowance auction under that scheme.

By Mike Szabo – mike@carbon-pulse.com

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