The world's largest exchange for trading carbon emission credits expects to more than double its trading volume this year as more companies come to the bourse to manage their environmental costs.
The European Climate Exchange (ECX), owned by Climate Exchange Plc, has overseen trading in credits for 2 billion metric tons of carbon emissions so far this year and predicts 2009 volume will top 6 billion metric tons, up from 2.8 billion last year, its chief executive said on Monday.
The volume growth is phenomenal, Patrick Birley told the Reuters Exchanges and Trading Summit in London.
The existing people subject to the (emission) caps are becoming more sophisticated and thinking more about how to manage their risks. We have a growing number of these people and geographically, more and more countries are getting involved.
ECX covers trading in pollution permits for electricity companies, oil and gas producers, cement and steel companies and pulp and paper makers -- the industries which encompass about 5,000 companies and account for 46 percent of all emissions in Europe, Birley said.
The European Union plans to subject the aviation industry to its emissions trading scheme from 2012, covering all airlines using its airspace, while Australia plans to start a domestic emissions trading scheme from mid-2011.
The intention is to slowly increase the number of industries coming in, Birley said, adding ECX has over 99 percent of the market in trading European carbon credit derivatives, including over-the-counter transactions.
In the smaller spot market, the exchange has gained a 2-3 percent market share following the launch of a product in March to compete with the only incumbent, BlueNext.
We are still hopeful that that will increase, Birley said.
(Editing by Dan Lalor)