ICE Expands its Global Environmental Complex With the Launch of UK Emissions Futures And Hosts First UK Emissions Auction

Rhea-AI Summary

Intercontinental Exchange (NYSE:ICE) has launched the ICE UK Allowance (UKA) Futures contracts and hosted the first auction of the UK Emissions Trading Scheme (UK ETS). A total of 6,052,000 UK allowances were successfully auctioned, with future auctions scheduled bi-weekly. The contracts trade on ICE Futures Europe and clear through ICE Clear Europe, part of a growing carbon market that saw a 40% increase in participants from 2017 to 2020. The auction has been positively received, signaling active market interest in emission trading.

Positive

• Successful launch of ICE UK Allowance Futures contracts.
• First UK ETS auction sold all 6,052,000 allowances.
• Growing participation in carbon markets, increasing by over 40% since 2017.

Negative

• None.

Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that it has launched ICE UK Allowance (“UKA”) Futures contracts and today hosted the first auction of the UK Emissions Trading Scheme (“UK ETS”).

Today, 6,052,000 UK allowances were offered for auction and all allowances were sold during the auction. Auctions of UKAs take place every other Wednesday throughout the year, between 12.00 and 14.00 UK time. Auctions have a floor price of £22 per tonne.

ICE UK Allowance (UKA) futures contracts, which launched today, are equivalent to 1000 Allowances. UKA Daily Futures are due to be launched on May 21, 2021.

ICE UKA futures trade on ICE Futures Europe and clear at ICE Clear Europe alongside ICE’s global environmental complex, including European Union Allowances (EUA), California Carbon Allowances (CCAs) and California Carbon Offsets (CCOs).

From 2017 to 2020, the number of participants trading ICE’s carbon markets increased by more than 40%. Participants based in North America were the strongest contributor to this growth, increasing by more than 70%. Meanwhile, the number of participants trading both European and North American carbon markets at ICE grew by approximately 85%.

“The first UK carbon auction today has seen active participation by the market”, said Gordon Bennett, Managing Director, Utility Markets, ICE. “Market based mechanisms like emission trading schemes play a crucial role in helping customers reduce their carbon emissions by attributing a cost to pollution. Now, there is an enormous opportunity for cap and trade programs to take an even greater role in supporting customers’ carbon reduction goals, whether it is increasing their sector coverage or encouraging international linking.”

ICE has been a leader in environmental markets for over two decades and offers customers access to the largest and most liquid environmental markets in the world.

More than 14 gigatonnes of carbon trades on ICE annually, which is equivalent to approximately 40% of the world’s total annual energy-related emissions footprint based on current estimates. A wide and increasing group of stakeholders use the price signals from ICE’s global 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.

Full details of the UK Allowance (UKA) auctions, including the auction calendar and auction results, can be found here alongside FAQs. Market participants who are interested in bidding in UK ETS auctions should contact sales-utilities@ice.com.

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.

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 here. 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, 2020, as filed with the SEC on February 4, 2021.

ICE- CORP
Source: Intercontinental Exchange

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FAQ

What are ICE UK Allowance Futures contracts?

ICE UK Allowance Futures contracts are financial instruments representing 1000 allowances for carbon emissions under the UK ETS.

When is the next UKA auction scheduled?

UKA auctions are held every other Wednesday throughout the year.

What was the outcome of the first UK ETS auction?

The first UK ETS auction offered 6,052,000 allowances, all of which were sold.

What is the floor price for UKA auctions?

The floor price for UKA auctions is set at £22 per tonne.

How has participation in ICE's carbon markets changed?

From 2017 to 2020, the number of participants in ICE's carbon markets increased by more than 40%, with North American participants growing by over 70%.