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European Carbon Markets: EUA Products

Learn more about trading EUAs on EEX

Cap & Trade

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 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 EUA
      • Minimum Price Flux: €10.00 per lot (€ 0.01 per EUA)
      • Last Trading Day: Last Monday of the maturity month
      • Physical delivery: The second ECC business day after the last trading day

    *See all contract specifications on the EEX Website

 

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

Financials

Banks, hedge funds, trading firms

About The EU ETS

  • 1 EUA is a certificate to emit 1 tonne of CO2 or CO2 equivalent
  • The EU ETS covers about 43% of the carbon footprint in Europe, and includes approximately11,000 energy intensive installations in the 28 EU Member states plus Iceland, Liechtenstein and Norway
  • Sectors: Energy intensive sectors including oil refineries, steel works and iron production, maritime shipping, aluminium, metals, cement, lime, glass, ceramics, pulp, paper, cardboard, acids and bulk organic chemicals. Aviation is also being phased in.
  • Shipping companies now have a phased in compliance mandate from 2024 to 2026 to cover their fleets’ emissions through the purchase of EUAs: 100% of a vessel’s emissions from voyages between EU and EEA ports and 50% of emissions from international voyages between an EU/EEA port and a non-EU/EEA port

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