issue 19.0, New Values Newsletter

1. New Values news
New Values likes to involve you in its plans and ideas. We keep you constantly informed about what we’re doing and how we’re responding to the latest market developments.

2. Jos Cozijnsen’s column
He’s a familiar figure: Jos Cozijnsen, the man behind emissierechten.nl and guest speaker at various meetings on emissions trading. Every month he airs his opinion in his column.

3. Diary
It’s important to stay up to date in a market that is continually subject to change. New Values keeps you informed about interesting congresses and workshops in the Netherlands and abroad.

1. New Values news

Trading can start

In the last days of May CO2 prices peaked through the roof, reaching new records every day -– 17 €/t on average in April and May, around 20 €/t by the end of May. The discrepancy with fundamental data, that point into a completely other direction, is being explained with high oil and gas prices, a low coal price, a very conservative market strategy especially amongst the small and medium sized emitters, and therefore a very limited liquidity in the market. Most importantly, though, only few national registers are up and running, so far. Until the mid of May, only about 8% of the yearly allowances of 2.2 billion EUA had been allocated to the companies, and currently only 7 out of 25 member states have a functioning register. A mere 0.6% of the allocated allowances has been traded until the mid of May, although the market is growing fast.

However, after hard weeks of work and programming, the connection between the German register and the Community Independent Transaction Log (CITL) seems to be reliabel now, so that the German emissions trading authority has begun to send out the registry access data, again. Whoever has received his access code should be able to access his accounts, now. Therefore, trading in Spots can begin. Climex will probably also take up its trading activity within this month.

Climex serves the European market

Many clients ask us in how many countries Climex is available. This is indeed an important question, for the more participants and countries can access the platform, the higher the trading efficiency against on single European CO2 price, and the higher the liquidity on the platform. This is why New Values has signed a number of cooperation agreements with marketing partners and other trading platforms, in order to ensure a broad market: SendeCO2 serves the markets in Spain, Portugal and Italy with its platform. In Germany, Climex is being marketed by 500 PPM. In The Netherlands, Belgium, Luxemborg and France, New Values propagates its platform by its own means, in the UK with the support of APX UK. Further cooperations for the new EU member states in Central and Eastern Europe are currently on their way. And finally, we should not forget the strategic alliance with AsiaCarbon, which will give a strong push to the trading in CER on the Climex platform.

All in all, New Values covers 58% of the European market directly (in terms of emissions), and about 87% together with partners.

New Values - Asia Carbon International B.V. collaboration

Asia Carbon International B.V. and New Values announced earlier this week that they will collaborate in carbon trading via their exchange platforms.

Asia Carbon and New Values propose to share their resources to create value in the EU ETS and CDM Spot and Forwards market in areas such us marketing, liquidity, credit risk management, contract standardization, operations and technology.

The goal of the collaboration is to create a global, cross-continental market by linking their current respective communities. Asia Carbon develops CDM projects through their own Asia Carbon Asset Development Facility (ACaDF™) and also directly procures CERs from Asia, Africa and Latin America. They have recently launched the prototype version of the 24x7 Asia Carbon Exchange Trading Platform, the ACXchange (™).

New Values have already completely established their trading platform for the trade of EU Allowances in the European EU ETS Spot and Forward market. Recently, New Values has established an alliance with SENDECO2, the South European carbon exchange.

NOx trading kicks off in the Netherlands

In April 2005 the “Act on Trading in NOx Emission Rights” was passed by the Upper House of the Dutch parliament, and the trading in NOx officially began on 1 June 2005. Registration of rights in the Emissions Registry starts on 1 July 2005, and trading in and transfer of NOx rights is possible from this moment on.

Ever since 2001 New Values has been operating its EEeXchange trading platform, which allows organizations to make up for shortfalls and to trade surpluses. In this way you always have the right amount of emission rights to meet the demands of legislation.

What is EEeXchange?
EEeXchange is an electronic marketplace for trading in NOx emission rights. EEeXchange not only puts you in contact with buyers and sellers, but also fully processes transactions for you at the contractual, financial and administrative levels. You carry out all transactions yourself at your workplace. EEeXchange is an initiative of New Values – you are probably already familiar with us from the Climex trading platform for trading in CO2 rights.

What are the benefits of using EEeXchange?

1. You come into contact with buyers and sellers of rights quickly and simply.


2. You have a central counterparty that covers the delivery risk and the payment risk.


3. You save time because all financial, contractual and administrative aspects of your transactions are handled automatically.


4. You make use of a fraud-proof back office operating in line with high banking standards.


5. The platform provides transparency in trading and prices.


6. The user-friendliness and accessibility of the platform are excellent

Register for the free workshop
Are you interested in trading through EEeXchange? Then we invite you to our free Workshop on Trading in NOx Emission Rights, where we explain the rules for NOx trading and show how the NOx platform works. The workshop takes place in the Mediaplaza in Utrecht on 28 June 2005 from 1.30pm to 5pm. This workshop is aimed at the Dutch market and will be conducted completely in Dutch.

To register, please use the form on the New Values website.

Climex Trading Session, Wednesday 22 June 2005

Six participants from three countries will participate in the first Climex Trading Session. Allthough every participant can trade 24 hours a day and 7 days a week Climex organises special sessions in which Climex platform members are invited to log-in and trade at a pre-defined date and time. In this case it will be Wednesday 22 June, from 10.00 till 12.00 hours CET.

During this session every participant has the certainty that other parties are online and willing to trade. In our experience these sessions are very usefull to the platform members and provide the starting market with liquidity. Almost all carbon trading sofar was bilateral or forward trading. Spot trading is still difficult because most registers in Europe are not yet ready and even most of the allocations have not yet been executed.

Finally, all the account managers from New Values will be available and online during a session as well, to provide any assistance or advice. And since we have supervised and supported a series of successfull Trading Sessions already, all participants can benefit from this experience.

If you have any questions regarding the coming Trading Session or anything regarding the Trading Session Concept, please contact Tames Rietdijk

2. Jos Cozijnsen’s column

Onwards with Europe: certainly with regard to emissions trading!
During the 'Green Week' in Brussels at the start of June a major topic of discussion was the further development of the European Emissions Trading System from 2008 onwards. A lot of goals and an equally large number of proposals for achieving them, it would seem. And it will be quite a job for the European Commission to sort things out, and at least to deal with the most pressing issues. Because every call for expansion, simplification or harmonization of the system soon runs into another counterproposal or ends up producing new barriers.
I won’t provide a survey of all the wishes expressed. This is a task that McKinsey will be handling for the European Commission. But I would like to make a few suggestions to stakeholders and to the European Commission, in the hope that these will save time and lead to a genuine improvement:

• Harmonization takes priority: take the lead from benchmarks for the allocation method, as is already being done in some Member States, i.e. take into account the emissions per ton product or per kWh. Moreover, the Commission must sort out the differences in interpretation, particularly with regard to installation definition and energy activities.


• Simplification: drop special rules for closing, early action, newcomers. Because companies already know how things stand and must simply take a look at the emissions and use the market to acquire extra possibilities. This also means auctioning of at least 10% of emission rights.


• More liquidity will be created if the threshold for participation is not lowered. Small and medium-sized companies should however be admitted to emissions trading. This will not mean more work for the authorities but actually less, and a shift in the workload. And more sectors should be subject to mandatory participation: aluminium smelters, chemical companies, large waste incinerators.


• A start should be made with the incorporation of more greenhouse gases, such as methane and N2O, in the system. In England it appears that companies are easily able to monitor these gases. So it would be a crying shame not to include these as well, especially in the cases of chemicals, fertilizer and aluminium.


• With regard to aviation, I advocate a closed trial phase in which the aviation industry operates its own emissions trading system that comprises airlines, industry, airports and transport. Because if you take the aircraft emissions in isolation then no major, cheap reductions can be expected. Then the only feasible option would be a levy. And if an entire sector does nothing but buy then it creates a market imbalance.


• Finally: CO2 which is transferred and reliably stored must result in a saving on emission rights. It is up to the individual company to determine whether this option is affordable and worth the investment risk. The emission reduction resulting from this should not be overlooked.

By the way, I hope that the European Commission will quickly shift the submission deadline for the Second Allocation Plan from July to December 2006. This will give itself the time to make amendment proposals. And it’s almost standard that the Allocation Plans are submitted late anyway; the time can then be better spent.

3. Diary

16-17 June, Emerging Carbon Markets, can they deliver?,
Chatham House, RIIA, London

11-12 July, "EU Emissions Trading, Competitive and Financial Implications",
Brussels, info:Environmental Finance (PDF)

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