Pointcarbon: 'spot EUA business shifts to brokers'

Brokers are seeing a rise in spot EUA business in the wake of France exempting tax on carbon.
Around 1.7 million spot EUA contracts have been handled by brokers and cleared through the Bluenext exchange in the last two days, which is around 25 per cent of the volume going through the bourse.
Before the tax change on 9 June, brokers accounted for an average of 116,500 spot EUAs a day cleared though Bluenext since the start of May, just 1.3 per cent of the spot volume going through bourse.
“We have definitely seen a pick up in spot business over the last two days. People are looking to trade the spread (between the spot and the 2009 future EUA) more than anything,” said one broker.

However, overall spot EUA volume has fallen sharply since the French government exempted value-added tax from carbon trades in a bid to counter potential fraudsters.

Bourse competition
Paris-based Bluenext still remains the favoured exchange to conduct spot EUA trading, but the volume of spot EUAs trading directly on its screen has fallen to an average of 2.14 million a day since 9 June.
This compares to 8.84 million spot EUAs trading on average a day in May and the first few days of June before the tax change.
The European Climate Exchange (ECX) has seen a slight rise in the volume of “daily futures” trading on its platform, with total volume of around 850,000 allowances going through the bourse in the last two days.
This daily average of 426,500 EUA daily futures improves on the 279,000 a day average since ECX started the contract on 1 May, but the exchange still remains second place to Bluenext.
Unlike Bluenext, which concludes payment and delivery of spot EUAs within 15 minutes of transaction, ECX has a daily future spot contract which settles at the end of each day and clears a day later.