The ECX EUA Futures contract were the first emissions products to be listed on the ICE Futures Europe platform (the former IPEwhen it was introduced for trading on 22 April 2005.  ECX EUA Futures are based on underlying EU allowances (EUAs) and provide the market with standardised contract terms and a benchmark for price discovery. ICE/ECX continues to be the most liquid and transparent platform for EUA trading offering transparent screen trading with tight spreads as well as the clearing of over-the-counter positions.

ECX EUA Futures were followed by the complementary EUA Options contracts that were introduced on 13 October 2006, and a spot-like EUA Daily Futures contract that was launched on 13 March 2009.  All ECX EUA Daily Futures, Futures and Options contracts are listed for electronic trading on ICE platform and regulated by the FSA in the UK.  ECX EUA products allow users to lock-in prices for emissions allowances delivered at set dates in the future and are a useful alternative to over-the-counter forward contracts, allowing users to secure transparent prices and reduce counterparty risk through the use of a central counterparty clearing mechanism. 

When traders open a futures position on the platform, ICE Clear Europe acts as the Buyer to every Seller and Seller to every Buyer through the open offer mechanism.  This creates a principal-to-principal contract between the Clearing Member and the Clearing House (where relevant this is replicated by a back-to-back contract between the Clearing Member and the client).  The Clearing House guarantees the financial performance of the contracts registered for clearing and assumes a Clearing Member’s portfolio in the event of a default.

About EUAs

European Union Allowances, or EUAs, are carbon credits issued under the EU Emissions Trading Scheme to CO2-emitting installations.  EUAs issued to installations are held in the electronic accounts of each EU-27 Member State's National Registry.  All EU registries are overseen by the EU-wide Community Independent Transaction Log, which tracks any transfers of EUAs. EUA trading within the Emissions Trading Scheme for 2008 reached a total of 3.1 billion metric tonnes valued at €67bn ($90bn).  This represents a more than twofold increase from 2007 trading volumes as estimated by Point Carbon.