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European Carbon Markets

Learn more about the EU ETS and EU ETS2 on EEX

Eu ETS & EU ETS2

The EU ETS was launched in 2005 to help tackle climate change, setting a Europe-wide annual cap on CO2 emissions which is reduced each year.

EUAs are available on the European Energy Exchange (EEX), which offers liquid secondary markets including:

  • EEX EUA spot
  • EEX EUA futures
  • EEX EUA options (futures style) contracts

EEX also hosts primary EUA auctions on behalf of EU member states. 

 

EU ETS2 (Coming July 7th)

As part of the broader Fit for 55 package, the EU ETS2 will launch in 2025 to extend emissions coverage to the buildings and road transport sectors, with compliance obligations beginning in 2027.  EU ETS2 allowances will be allocated through primary auctions in 2027 provided by EEX, and the EU ETS2 futures contract will be offered on the exchange with the first expiry set at December 2027.                                                                                                                                         
  • Enables early hedging ahead of 2027 compliance obligations
  • Contract specifications align with EUA Futures
  • Physically settled with delivery via ECC

 

EU ETS Goals

The EU ETS is a key part of the “Fit for 55” legislation that aims to lower emissions at least 55% by 2030, compared to 1990 levels. Now in the EU ETS’s fourth phase (2021 to 2030), the plan calls for a linear carbon cap reduction factor of 4.3% per year from 2024 to 2027 and 4.4% from 2028 to 2030.

CONTRACT OVERVIEWS

EUA Futures

      • Contract Size: 1,000 allowances
      • Priced in Euros
      • Minimum Tick Size: €0.01 per EU ETS allowance
      • Minimum Price Flux: €0.01 per EU ETS allowance
      • Last Trading Day: Last Monday of the maturity month
      • Physical Delivery: The second ECC business day after the last trading day

     

 

EEX EU ETS2 Futures

      • Contract Size: 1,000 allowances
      • Priced in Euros
      • Minimum Tick Size: €0.01 per EU ETS allowance
      • Minimum Price Flux: €0.01 per EU ETS allowance
      • Last Trading Day: Last Monday of the maturity month
      • Physical Delivery: The second ECC business day after the last trading day

 

     

 

EUA OPTIONS (Futures Style)

  • European Style
  • Lot Size: 1 lot of the underlying contract
  • Priced in euros
  • Fulfillment: EEX EUA Futures Options will be exercised into EUA Futures contracts at the respective date
  • Last Trading Day: The third exchange trading day prior to the Last Trading Day of the EEX EUA Month Future that expires in the same month in which the option expires.
  • Exercise: Exercised automatically on the last trading day if they are in the money in relation to the final settlement price of the respective underlying future.

* See all contract specifications on the EEX Website.

Market Participants

Energy Sector

Industrial Sector

Utility Companies

Maritime Shipping

Aviation

Buildings & Road Transport

Financials

Banks, hedge funds, trading firms

About The EU ETS & EU ETS 2

  • 1 EUA is a certificate permitting the emission of 1 tonne of CO₂ or CO₂ equivalent.
  • The EU ETS currently covers approximately 43% of Europe’s total emissions, involving around 11,000 energy-intensive installations across the 27 EU Member States plus Iceland, Liechtenstein, and Norway.
  • Covered sectors include:
    Oil refineries, steel works, iron production, aluminium, metals, cement, lime, glass, ceramics, pulp, paper, cardboard, acids, bulk organic chemicals, and maritime shipping.
    Aviation is also gradually being incorporated.
  • From 2024 to 2026, shipping companies must cover:                                   100% of emissions from voyages between EU and EEA ports                       50% of emissions from international voyages involving a non-EU/EEA port
  • EU ETS2, launching in 2027, will expand the system to cover emissions from buildings and road transport.
  • See all contract specifications on the EEX Website.

Key Benefits of Trading on EEX

  • Emissions Spot Market Margining
      • No requirement for an upfront initial margin payment
      • Margin offsets are available between Carbon, European Power and Gas Markets
  • EUA as Colleterial (Margin Credit) – EUAs can be used to reduce the initial margin requirements for:
      • EUA Spot Market (unrestricted number of certificates used)
      • EUA Derivatives Market (up to a covered net short-position in EUA futures
  • Expiry dates & delivery times of EEX contracts are aligned with other exchanges
      • In addition: T+0 delivery possible vial the same-day transfer service, regular T+1 request for transfer can be pre-dated to current day
  • Most competitive fee structure

 

  • Strong customer focus and personal assistance through account managers in London, Leipzig, Paris, Milan, Madrid, Chicago, Oslo.

Key Benefits of Trading on EEX

  • Emissions Spot Market Margining
      • No requirement for an upfront initial margin payment
      • Margin offsets are available between Carbon, European Power and Gas Markets
  • EUA as Colleterial (Margin Credit) – EUAs can be used to reduce the initial margin requirements for:
      • EUA Spot Market (unrestricted number of certificates used)
      • EUA Derivatives Market (up to a covered net short-position in EUA futures
  • Expiry dates & delivery times of EEX contracts are aligned with other exchanges
      • In addition: T+0 delivery possible vial the same-day transfer service, regular T+1 request for transfer can be pre-dated to current day
  • Most competitive fee structure

 

  • Strong customer focus and personal assistance through account managers in London, Leipzig, Paris, Milan, Madrid, Chicago, Oslo.

ADDITIONAL RESOURCES

PDF

EU ETS Market Background

PDF

Key Benefits of Trading on EEX