EEX / Access to EUA
Miyoshi Nishimura
EEX Asia
11 October 2023

Today’s contents▪ Introduction of EEX Group▪ Our initiatives in environmental area
▪ Access to EUA on primary and secondarymarket▪ Actions▪ Secondary market products▪ Membership models© EEX AG, 2023

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Who is EEX? (1)EEX is the leading energy exchange and exclusively hosts primary auction under EU ETS(appointed by EC) for 12 years as well as offers spot/futures market
EEX (European Energy

One of the major exchanges for dry bulk freight futures – the largest open interest in PanamaxExchange) Group
More than 800 employees working from 21 offices including Singapore

PowerDry bulk freight

Agriculture

Natural gas

Environmental (incl EUA)

Guarantee of Origin

Asset classes

Clearing services

Clearing services are centralized at European Commodity Clearing (ECC：Europe, Asia) andNodal Clear (U.S.)
Major shareholder is Deutsche Börse (75,05%)

Shareholders

Municipalities (i.g. State of Saxony, Leipzig) (7,94%)

Utilities, energy and financial industries (i.g. Uniper, EnBW, EdF) (17,03%)© EEX AG, 2023

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Who is EEX? (2)#1
No.1 exchange in powerin Powertrading worldwide
Trading Worldwide#2 major
One of theexchangefor drybulk
in Emissions
Tradingfreightfutures
Worldwide

Exclusively #3
host primary
auction under EU ETS /in
NaturalGas
offer
futureandTrading
spotWorldwide
market4© EEX AG, 2023

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Our team in Singapore© EEX AG, 2023

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5Carbon Markets at EEX
We develop and operate market infrastructure (trading, clearing, registries), with proven track-record ofsuccessful cooperation with governments and clients alikeChina ETS
Local partners

UK ETS

WCI(as of 2023)

Derivatives

Auction operator;
Spot & Derivatives

RGGIDerivatives

Washington ETS

compliance markets

Derivatives© EEX AG, 2023

EU ETS

German Sector nEHS
Official sell-off platform

NZ ETS
Auction operator(in cooperation with NZXEU ETS-

Exclusive auction hosts for all EU governments, operating auctions on almost daily basis
Secondary Market (Spot, Futures, Options)

German nEHS-

Official sell-off platform for German Fuel ETS (transport, heat sectors)

UK ETS-

Secondary Market in preparationWestern Climate
Initiative (WCI)-Futures & Options, as well as other Environmental Markets (RECs, RINs, SO2/NOx)

RGGI

-

Futures & Options for the Regional Greenhouse Gas Initiative

Washington ETS-Futures & Options, launched in December 2022

NZ ETS-Auction operator in partnership with New Zealand Exchange (NZX)

China ETS

-Cooperation with partners (CBEEX Beijing, CNEEEX Shanghai, CEEX, GFEX Guangzhou)

Voluntary Carbon
Market-Dedicated VCM product suite (CORSIA-eligible, Nature-based, Removal, GER basket contract)
listed at Nodal (since JuneConfidential2022) and EEX (in the future)

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EU ETS- The EU Emissions Trading System (EU ETS) sets an overall limit (the “cap”) on the GHG
emissions for the sectors included (currently power, industry, aviation). The cap decreases
every year, ensuring that total emissions fall.
- 1 EUA = 1 ton of CO2 (equivalent). One emission allowance gives the holder the right to emit
1 ton of CO2 (equivalent).

© EEX AG, 2023

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Access to primary and secondary market- Within the cap, companies buy emission allowances (through primary auction), which they cantrade as needed (through secondary market).
Free allocation(Not applicable tomaritime industry)

Secondary market
EUAEUAEUA

Primary auction(exclusivelyhosted by EEX )Access to secondary market
Access to primary auctiona) bid directly (by becoming direct memberat EEX), orb) bid indirectly through intermediaries
In both cases, the company needs tofulfill the eligibility of auction (explained later)© EEX AG, 2023c) become direct member at EEX, ord) become agency customer at a clearing member

In case of c), ECC’s internal account can be used.
There’s membership that covers both dry bulk
freights and EUA (explained later).

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Auctions - Background- A transparent method for allocating emission allowances that allows participants to acquire
the allowances concerned at market price- The default method of allocating allowances since 2013 (phase 3 of the EU ETS).
Up to 57% of the allowances are allocated through auctioning. The proportion of allowancesbusinesses have to buy through auctions is increasing due to decreased free allocation.

Millions- The exact auctioning volume will be determined annually based on the provisions of theETS Directive
900
800
700600500
4003002001000250

214198207196208212217

218

230

222200166
91150100925002010© EEX AG, 2023

2011

2012
2013
2014
2015
Auction Volume in Million EUA per Year (l.a.)2016

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2017
2018
2019
2020
Number of Auctions at EEX per Year (r.a.)

2021

2022
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Auctions - Eligibility
Eligible participants according the EU Auctioning Regulation are:• Compliance buyers• Investment firms and credit institutions authorized under MiFID or Banking Directive• Business groupings of compliance buyers• Other intermediaries specifically authorized by the home Member State

These participants have to fulfil admission requirements according to EU and EEX rules, i.g.:• Establishment in the EU (except for compliance buyers)• Hold a nominated holding account in the Union registry• Conclusion of an agreement with a clearing member of ECC
EEX’s Eligibility form can be found here
Examples of clearing members•
ABN AMRO Clearing Bank N.V.
•MAREX Financial•
Banco Santander, S.A.
•Mizuho Securities USA LLC•
BNP Paribas S.A.
•
Morgan Stanley & Co. International plc / Morgan Stanley Europe SE•
BofA Securities Europe SA•
Société Générale SA•
Citigroup Global Markets Europe AG / Citigroup Global Markets Limited •StoneX Financial Ltd•
Commerzbank AG•
UBS AG•
Goldman Sachs International•
UniCredit Bank AG•
J.P. Morgan SE•
Macquarie Bank Europe Designated Activity Company
Full list of ECC clearing members can be found here
© EEX AG, 2023
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Auctions - Process- Auction is held almost every business day. Bidding window is 9-11am CET, and result will bedetermined at 11:01am CET.
9:00-11:00 am CET~11:01 am CET

オークションの要領
Bidding Window:
Determination of theauction clearing price:• Bids could be submitted,• Bids are sorted inmodified and withdrawn
descending order of the priceduring the bidding windowbid• Bids could be submitted
directly in the Auction System • Tied bids are sorted throughrandom selection according to(see Video Tutorial) oran algorithm
indirectly via EEX Helpdesk• Bid volumes are added,
or via Intermediarystarting with the highest bid• Bids are submitted without• The price at which theseeing other participant’ssummed up bid volumes
bids
match or exceed the volume© EEX AG, 2023
of allowances auctioned
Min lot size: 500 EUAs
sets the auction clearing price(=500 t CO2e)
for all successful bidders~11:05 am CETPublication:• Detailed auction Results on
the Website

Auction Day + 1
ECC Business dayPayment:• From the Clearing Memberof a Trading Member to ECC• From ECC to the Auctioneer
Delivery (internal):• Transfer of allowances within
the ECC Union Registry
Account from the Auctioneer(Seller) to the Trading
Member (potentially anIntermediary*) having beensuccessful in the Emissions
Auction (Buyer)

Upon Request

Deliver (external):• Transfer of allowances fromthe ECC Union Registry
Account to the Union
Registry Account of theTrading Member* Delivery between the Intermediary and his client, if applicable, is to be agreed bilaterally.

© EEX AG, 2023

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Auctions - Cancellation- An auction will be cancelled under certain conditions:a)

Total volume of bids falls short of the volume of auctioned allowances(Art. 7(5) Auctioning Regulation)b)

If the auction clearing price is significantly under the secondary market price(Art. 7(6) Auctioning Regulation)c)Technical problems occur or are likely to occur (Art. 9 Auctioning Regulation)- If an auction is cancelled, the following procedures will apply:1.

Immediate information of market participants by EEX

2.

Re-adjustment of the auction calendar

3.

Auction volume will be evenly distributed over the next four (in case of EUAAs: two)scheduled auctions

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Secondary market products- EEX offers all major trading instruments in the EU Emissions Trading Scheme (ETS).
- Since 2005, EEX is operating trading in Emissions secondary markets. By that, it provides allnecessary tools for market players to maintain their trading and hedging needs.

Secondary Market
Spot trading with T+1 delivery

EU Allowances (EUA)

EU Aviation Allowances (EUAA)
Futures trading with T+2 delivery after expiry,incl. related spreads

EU Allowances (EUA)

Options trading on Futures

EU Allowance (EUA) Dec-Futures

18 years
experience in operating
EU ETS
continuous© EEX
AG, 2023 markets

EU Aviation Allowances (EUAA)

▪
▪
▪
▪

State-of-the-art trading infrastructure
Covers all EEX Futures plus Emissions spot
Fully browser-based, platform independent
Automatic and Algo trading, individual spreads(all other major ISVs supported)
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Full membership

Emerging andEnvironmental Markets

Auction-only• Access to all EEX Markets (Spot, Derivatives) andproducts (power, natural gas, emission, coal)• Membership fee (*): € 37,000 p.a.

• Access to EUA primary and secondary markets, freight,
other emerging products like natural gas• Membership fee: € 5,000 p.a. (**)

• Access to EUA primary auctions only
• Membership fee: € 0 p.a.

(*) There are other fees such as transaction fees, technical fees, clearing fees, etc.
(**) Reduced to € 2,500 p.a. for participation exclusively in trading in emission allowances on the spot market© EEX AG, 2023

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Contacts•© EEX AG, 2023

Miyoshi Nishimura+65-8809-4260
mnishimura@eexasia.com

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