“This market will underline the importance of the mobilising all possible sources for achieving the renewables targets, in a competitive and therefore most cost-effective way - thus paving the way to a renewable energy supply at the best ratio between cost and benefits, both for the energy supply and the environment,” explains Bert den Ouden, CEO of APX-ENDEX.
The exchange will be developed in two phases. Phase one starts with non-cleared products where the physical settlement is arranged bilaterally by the counterparties, allowing market participants to trade standard contracts in a transparent environment. During phase two, clearing services for wood pellets contracts will be developed and implemented, providing further financial security to market participants. This is scheduled to take place during the course of 2012. Contracts offered for trading include three months contracts, three quarters and three calendars. As with all the APX-ENDEX futures contracts, wood pellets contracts are listed on Trayport’s Global Vision Trading Gateway.
APX-ENDEX has published a reference price index for industrial wood pellets since 2008, providing the market a valuable tool to increase price transparency. As a response to the market request, APX-ENDEX and Port of Rotterdam announced in July 2010 their intension to launch the world’s first exchange-traded industrial wood pellets contracts.
A joint market consultation study among market participants and other relevant stakeholders revealed the growth potential of the industrial wood pellets market and the need for exchange traded biomass products.
During the process of finalising the design of the market and the product specifications (including the sustainability criteria), APX-ENDEX has closely cooperated with the market participants already active in trading biomass products and their support and feedback has been vital for launching the wood pellets exchange. With the final approval by the Netherlands Authority for the Financial Markets, APX-ENDEX is now ready to launch the market.
“The trade platform is indispensible to make energy generation more sustainable via the use of biomass,” comments Hans Smits, CEO of the Port of Rotterdam Authority.
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