Earlier this week Enmacc, the largest European over-the-counter (OTC) trading platform for energy and environmental commodities has launched an emissions allowances platform.
Demand from market participants like heavy industry and energy companies for a wholesale market is the main driver behind the platform’s development, which will provide more hedging and liquidity options. Jens Hartmann, CEO of Enmacc, commented on the launch by saying: “Efficient markets for energy and environmental commodities will play a major role in accelerating the energy transition. Especially market-based instruments – such as the Emissions Trading System – are destined to grow in importance. Enmacc provides digital market access to traders, and corporates need to seize the opportunities in these markets.”
Enmacc is already a powerhouse when it comes to energy and gas trading, as well as environmental markets like guarantees-of-origin. This new platform allows Enmacc to expand further into the rapidly growing green economy with the 750 billion euro market of EU Emissions Allowances (EUAs) which hasn’t been available for OTC trading.
The European Union’s Emissions Trading System (EU ETS) is designed for price discovery of carbon dioxide emissions which currently stands at 100 euro per ton.
Relevant: EU Carbon Price At All-Time High, Trading Over 100 euros/tonne
But most of the participants in this market can’t actually trade directly on the primary and even secondary markets with trading performed over phone or email. By having a digital platform Enmacc is expected to instantly improve liquidity and sharpen prices.
The platform provides access to a network of 470 potential counterparties via the request-for-quote (RFQ) workflow, removing the limitations of a cumbersome communication flow for deal-making.
Another important component that the Enmacc platform offers is a diveristy of contracts. Futures, customized delivery dates and non-standard deal volumes will all be available.
Read more: Maritime Transport Added To EU ETS For The First Time
Evolution Markets pioneered an OTC platform for emissions 23 years ago.