Climate Exchange veterans eye new environmental contracts

A suite of new environmental contracts is planned for launch on the European Energy Exchange (EEX), supported by senior executives of the former Climate Exchange. They include: Neil Eckert, co-founder and former CEO of Climate Exchange Plc; Michael MacGregor, former managing director of the Chicago Climate Futures Exchange (CCFE); Dan Scarborough, former senior vice-president of the CCFE; Michael Walsh, co-founder and executive vice-president of the Chicago Climate Exchange (CCX); and Nathan Clark, formerly managing director and senior vice-president of the CCX.

Their new company, IncubEx, describes itself as an “incubator for exchange-traded products, services and technology solutions”. In addition to environmental contracts, it is also looking for opportunities in reinsurance and other commodity markets. Climate Exchange Plc was the parent company of the CCX and the European Climate Exchange – Europe’s main carbon market – until it was acquired by Intercontinental Exchange for a reported £395 million in 2010. Under its cooperation agreement with EEX – a Deutsche Borse subsidiary – IncubEx is also helping to attract new users to EEX’s existing contracts, with an initial focus on futures and options on EU carbon allowances (EUAs).

Other environmental contracts already listed on the exchange include:  futures on certified emission reductions, wood pellet futures and wind power futures. EEX also holds regular auctions of EUAs and EU aviation allowances. “The aim is to help make EEX the most successful environmental exchange in Europe,” Eckert told Environmental Finance. This position is currently held by Intercontinental Exchange. EEX also “wants a serious presence in the environmental markets,” he added. IncubEx has offices in Chicago and London and Eckert has a 28.8% stake in the firm via his UK-based biomass company Aggregated Micro Power Holdings (AMPH).

The remaining equity is held by management and wealthy individual investors. Eckert serves as non-executive chairman of the company, MacGregor is CEO, Scarborough is president and chief operating officer, Walsh is managing director of research and public policy, and Clark is managing director of North America. “We intend to be active in the US markets in 2018,” Eckert added. This will be facilitated by EEX’s acquisition in May of Nodal Exchange Holdings, a US energy exchange. Meanwhile, AMPH is growing rapidly, having posted a maiden pre-tax profit of £0.9 million for the year ending 31 March on turnover of £19.7 million, up from £1.3 million for the 15 months to 31 March 2016. It also now boasts Drax, one of the UK’s largest power generators, as a shareholder after AMPH bought Billington Bioenergy from the company for £2.0 million in October.

Graham Cooper
Republished with permission by Environmental Finance | www.environmental-finance.com