The long-term agreement extends the collaboration and builds on the significant progress made by the initial cooperation between EEX Group and IncuEx which has increased the range of environmental products and liquidity in the European and North American markets.
In Europe, EEX and IncubEx strengthened EEX’s listed European Union Allowance (EUA) derivatives market in the second leading exchange market. The Open Interest market share in the EUA futures contract has increased from 5% in 2017 to 22% today. Collectively, EEX and Nodal Exchange, the US division of EEX Group, now offer the broadest global suite of listed environmental futures and options contracts, including carbon quotas and offsets, renewable energy certificates (RECs) and renewable fuel credits. The collaboration between IncubEx and EEX Group started successfully in Europe and was subsequently extended to North America.
“Sustainability is our future, as an exchange and as human beings,” said Peter Reitz, CEO of EEX. “We are committed to further developing global environmental markets together with IncubEx. That is why it was not difficult for us to extend the joint cooperation agreement ».
In North America, IncubEx partnered with Nodal Exchange to launch its first environmental contracts in 2018. Since then, Nodal has listed more than 100 separate environmental products, complementing Nodal’s core energy and natural gas futures contracts. The Open Interest market share in North American environmental products on the Nodal Exchange has increased from zero to over 17% today.
“The combination of Incubax’s environmental expertise with Nodal’s trading and clearing expertise has resulted in an offering of exceptional environmental options and perspectives to better meet the needs of market participants in North America,” said Paul Cusenza, CEO of Nodal. “We are proud of our global cooperation with EEX, Nodal and IncubEx which allows us to play a role, with our market stakeholders, in contributing to a global effort to better address the challenges we all face with climate change and preserve our planet for the future. ”
Since 2017, more than 5.1 million contracts in European and North American carbon products have been negotiated under the cooperation, equivalent to 5.1 billion tons of CO2. In addition, more than 444,000 renewable energy certificate (REC) contracts (representing nearly 130 million MWh) were traded on Nodal, reaching a record open interest in May 2022 of just under 180,000 contracts (representing 44 million MWh). .
The cooperation has recently been expanded with a wide range of products for voluntary carbon markets (VCM). EEX Group’s suite of VCM contracts covers four different products, aimed at striking a balance between standardization, on the one hand, and satisfying different customer preferences, on the other.
“When IncubEx was founded in 2016, we believed that a dedicated team focused solely on developing environmental markets with the right exchange partners was urgent,” said Michael MacGregor, CEO of IncubEx. “By working with EEX and Nodal, we have established a significant market share, which has solidified our partnership as innovators in environmental markets, but most importantly provided products and solutions to serve our global customer base and accelerate further growth in the markets. Looking to the future, there is tremendous momentum underpinned by unprecedented support for zero net targets and market-based solutions to address environmental issues. ”
IncubEx was founded by key executives of the Chicago Climate Exchange (i.e., Climate Exchange plc), which established the world’s first voluntary, yet legally binding, carbon market.
EEX Group builds safe, successful and sustainable commodity markets around the world, together with its customers. The group offers trade in electricity, natural gas, environmental products, commodities and agriculture, as well as subsequent clearing and registration services, connecting a network of more than 800 commercial operators. The EEX group consists of the European Energy Exchange (EEX), EPEX SPOT, EEX Asia, Power Exchange Central Europe (PXE) and Nodal Exchange, as well as the registry provider Grexel Systems and the software companies KB Tech and Lacima. Clearing is provided by the clearing houses of the EEX European Commodity Clearing (ECC) Group and Nodal Clear. The EEX Group is part of the Deutsche Börse Group. More information: www.eex-group.com
IncubEx is an incubator of products, services and technology solutions in environmental markets with partners and stakeholders to design and develop new financial markets, technologies and business solutions in the global markets for the environment, climate risk and related commodities. The company works in partnership with its global exchange partner, European Energy Exchange (EEX) and its US subsidiary, Nodal Exchange. The IncubEx team is led by former key executives of Climate Exchange, which pioneered trade-based environmental trade and CCX, the first and only voluntary, yet legally binding, greenhouse gas emissions trading and reduction program. IncubEx, a privately held company founded in 2016 with offices in Chicago and London, is uniquely positioned to seize these opportunities globally with its partners. For more information, visit https://theincubax.com/