Euronext to launch emissions exchange

Euronext, the pan-European exchange operator, on Thursday announced it would launch an exchange for trading carbon dioxide emissions in March.

Euronext is the fourth exchange to announce plans. It will compete with NordPool, the Nordic power exchange that started trading and clearing European Union Allowances for CO this week, and Amsterdam-based European Climate Exchange (ECX) which begins trading early next month.

Germany's EEX power exchange, based in Leipzig, has not yet announced a start date for its plans.

The exchanges will also compete with a fast-growing over-the-counter market.

The rush of new exchanges follows new European Union rules obliging factories and power stations to hold allowances for each metric tonne of CO they emit. They receive some free allowances from their governments. To emit more CO they must buy additional certificates from those with surplus allowances.

The emissions market received a boost last October when Russia ratified the Kyoto protocol on greenhouse gases. The EU has about 12,000 CO emitters.

Euronext's exchange will operate in conjunction with Powernext, the French electricity exchange in which Euronext is the biggest shareholder, and French state-owned bank Caisse des Dépôts et Consignations.

Trading fees have not yet been disclosed.

Amsterdam's ECX, owned by the Chicago Climate Exchange, is offering trading on London-based International Petroleum Exchange.

The right to release one tonne of CO currently trades at about €8.50, compared with €6 in mid-2003.

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