ICE appointed to host UK emissions auctions for the UK Emissions Trading Scheme

Rhea-AI Summary

Intercontinental Exchange (NYSE:ICE) has been selected to conduct emissions auctions for the UK Government's Department for Business, Energy and Industrial Strategy. This initiative supports the launch of the UK Emissions Trading Scheme (UK ETS) starting January 1, 2021, which replaces the EU ETS. Auctions are set to begin by the second quarter of 2021, pending regulatory approval. ICE has a strong background in environmental markets, with open interest in EUA hitting a record €51.4 billion, reflecting a 20% increase in average daily volume. ICE has hosted EUA auctions for the UK Government since 2012.

Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announces that ICE has been appointed to host emissions auctions on behalf of the UK Government’s Department for Business, Energy and Industrial Strategy (BEIS).

As announced on December 14, 2020, the UK Government and Devolved Administrations will launch a UK Emissions Trading Scheme (UK ETS) from January 1, 2021, to replace the UK’s participation in the EU ETS.

Further details on the auction calendar and the spot and futures contracts ICE intends to launch in connection with the new UK ETS will be announced in due course. ICE plans to commence auctions and launch the related futures contracts as soon as feasible and no later than the second quarter of 2021, subject to regulatory approval.

“We congratulate the UK Government for its commitment and vision for a UK emissions trading scheme and are delighted to continue hosting auctions on its behalf,” said Gordon Bennett, Managing Director, Utility Markets at ICE. “Market-based mechanisms like carbon cap and trade programs are pivotal in allowing policy makers to control the quantity of carbon to align with their net-zero commitments and consequently put a price on the externality of pollution to reach those goals in the most cost-effective manner.”

ICE has conducted Phase III EUA auctions on behalf of the UK Government since November 2012 and the first EUAA auction on ICE took place in September 2014.

ICE has been a leader in environmental markets for nearly two decades. A wide and increasing group of stakeholders use the price signals from ICE’s markets and indices to help assess climate transition risk in their portfolios, and access liquidity pools for compliance purposes, managing risk and allocating capital to benefit from energy transition opportunities.

On December 4, EUA open interest (OI) hit a record value for notional equivalent of more than €51.4 billion. EUA futures and options are part of ICE’s environmental complex which also includes futures and options connected to ICE’s California Carbon allowances (CCA), Regional Greenhouse Gas Initiative (RGGI) and renewable energy credits (RECs). ADV in the environmental complex is up by approximately 20%, with OI up by approximately 16% from the end of 2019.

About Intercontinental Exchange

Intercontinental Exchange (NYSE: ICE) is a Fortune 500 company and provider of marketplace infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. We operate regulated marketplaces, including the New York Stock Exchange, for the listing, trading and clearing of a broad array of derivatives contracts and financial securities across major asset classes. Our comprehensive data services offering supports the trading, investment, risk management and connectivity needs of customers around the world and across asset classes. As a leading technology provider for the U.S. residential mortgage industry, ICE Mortgage Technology provides the technology and infrastructure to transform and digitize U.S. residential mortgages, from application and loan origination through to final settlement.

Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at http://www.intercontinentalexchange.com/terms-of-use. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 6, 2020.

Source: Intercontinental Exchange

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FAQ

What is the UK Emissions Trading Scheme and when does it start?

The UK Emissions Trading Scheme (UK ETS) is set to launch on January 1, 2021, replacing the UK's involvement in the EU ETS.

What role is ICE playing in the UK emissions auctions?

ICE has been appointed to host the emissions auctions on behalf of the UK Government's Department for Business, Energy and Industrial Strategy.

When will ICE start conducting emissions auctions?

ICE plans to commence emissions auctions no later than the second quarter of 2021, subject to regulatory approval.

What achievements has ICE had in environmental markets?

ICE has seen its EUA open interest reach a record value of over €51.4 billion, with a 20% increase in average daily volume in environmental complex products.

How long has ICE been involved with EUA auctions?

ICE has conducted EUA auctions on behalf of the UK Government since November 2012.