Download pdf - Emerging & Existing Trading Platforms

RENEWABLE ENERGY MARKETS

DECEMBER 3, 2014 | CTX

Emerging & Existing Trading Platforms

Scott Hernandez

Head of Sales & Trading, North America

CTX operates spot exchanges for multiple environmental commodity

markets, including Carbon and Renewable Energy Certificates (RECs).

OVERVIEW OF CTX

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OUR PARTNERS

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How it works


Product standard

identified by

symbol and colour

Search for

projects by 6

variables

Add a bid to

show interest

or ‘advertise’

for projects

not listed

‘i’ detailed

project

information

Purchase

credits

Partial sale

symbol –

purchase any

quantity from

offer volume

REC Platform – Australia Regulatory Market


SimpleSecure

Transparent

Voluntary Carbon Market

Verified Carbon Standard• Verified Carbon Unit (VCUs)• Non-Activated VCUs

Gold Standard• Verified Emission Reduction (VERs)

Climate Action Reserve• Climate Reserve Ton (CRTs)• Non-Activated CRTs

American Carbon Registry• Emissions Reduction Ton (ERTs)• Early Action ERTs

Australian REC Market

Large-Scale Generation Certificates (LGCs)

Small-Scale TechnologyCertificates (STCs)

Australian Water Market

(partly-owned associate)

Permanent Entitlements

Temporary Allocations

Alberta Regulated Carbon Market

Emissions Performance Credits (EPCs)

Alberta Offsets

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CTX SPOT MARKET PRODUCTS

• Secondary market trading activity consists mainly of OTC spot products and

exchange-cleared futures contracts

• No other exchange platform currently exists for the spot trading in environmental

credit markets

– Why not?

– Credit issues?

– Solutions?

MARKET OVERVIEW

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BENEFITS OF EXCHANGE TRADING VS OTC

Exchange OTC

Centralized pool of liquidity X

Electronic clearing and settlement X

Same-day settlement of products and funds X

No credit, delivery or counterparty risk X

Real-time price transparency X

Continuous trading contract for all transactions X

Secure and transparent web-based marketplace X

Anonymous trading X

Rules-based trading environment X


HOW EXCHANGES DRIVE MARKET LIQUIDITY


– Mature markets trend toward exchange-

based trading

• Example: EU ETS Market (see chart)

– Increase liquidity by providing centralized

marketplaces for market participants,

regardless of location.

– Converge fragmented markets and provide

regional (and international) linkages,

facilitating least-cost compliance for market

participants

– Benefits entire by developing centralized

pools of liquidity, facilitating efficient price

discovery within a rules-based trading

environment.

Exchanges and Regulatory Hurdles


– Exchanges can overcome the regulatory hurdles that market

participants face when operating across multiple compliance

programs and jurisdictions.

– Dodd-Frank Act: designed to promote stability, accountability and

transparency in the financial system

• driving markets towards screen-based trading

• Increased demand for spot/physical delivery.

– Exchanges promote an efficient and effective regulatory environment

for the trading of renewable energy and other environmental

commodities.

CTX SPOT MARKETKEY FEATURES

Element Features

Exchange

• Simple to use

• Secure, transparent and anonymous web-based trading environment

• Central location for buyers and sellers to spot trade in multiple markets and

products

• Visibility of all bids and offers

• Automated matching process

• Increased price transparency and liquidity

Operating Rules &

Procedures

• Standardised continuous trading contract

• Provides for a fair, orderly and transparent market

• Reduced transaction & administrative costs (compared to OTC contracts)

CTX Product

Accounts

• Secure retention of legal title to credits

• Pre-clearing of credits and cash

• Same-day settlement and delivery

• No credit/delivery risk

CTX Cash Accounts

• Secure management of funds dedicated for trading

• Pre-clearing of funds for bids

• Same-day settlement of funds

• No credit risk

• Clear ownership of cash accounts


CONTACT

Scott Hernandez

Head of Sales & Trading, North

America

M: +1-202-716-0111

E: [email protected]

Nathan Rockliff

Chief Operating Officer

M: +1-347-325-4655

E: [email protected]

Carbon Trade Exchange Inc885 Third Avenue, Suite 3180, New York, NY 10022

+1-212-916-7473

www.ctxglobal.com


mailto:[email protected]

mailto:[email protected]