Brexit: London loses the carbon market

Posted on Feb 12, 2019 2021 at 6:17Updated Feb 12, 2019 2021 at 7:06

It’s another big blow for the City. The American stock exchange operator ICE (Intercontinental Exchange) announced Monday that it will move its market for CO2 emissions allowances and European carbon futures contracts from London to the Netherlands as early as the second quarter. A direct consequence of Brexit, which makes it more complicated and costly for European players to carry out their transactions on British territory.

The ICE carbon market, one of the largest with an average of € 1 billion in trade per day, plays a key role in the European strategy to combat climate change. Carbon credits are indeed “rights to pollute” that companies emitting greenhouse gases must purchase to meet their regulatory requirements. The overall value of the carbon credit market in Europe (including ICE and its competitors) has increased significantly from € 169 billion in 2019 to € 201 billion in 2020, according to data from Refinitiv. Volumes of carbon futures and options have more than doubled since 2015.

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