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Introduction
world
W
ith global energy use projected to double in the EEX/Eurex CO
2
derivatives give market participants and
next twenty years under the assumption of a institutional investors equal and efficient access to carbon
business-as-usualenvironment,thedevelopment markets,withtheaddedattractionofsubstantialmitigation
of more efficient energy supply and consumption patterns, of counterparty risks and the added flexibility of clearing
together with carbon storage facilities, is essential for the off-exchange trades via a central counterparty such as
transition to a low-carbon economy. Additionally, the Eurex Clearing and European Commodity Clearing.
development of new energy technologies will require a The development and growth of financial markets has
major transformation of energy business thought and gone hand in hand with the need for ever improved news
practice – from how we utilise ever scarcer resources to and data related services. Speed and provision of reliable
developingaradicalchangeinenergyconsumption. real-timemarketdataandanalyticshaveturnedintoakey
The current economic slowdown, which has already led success factor for traders and other market participants.
to a number of cancellations in power investment Eurex continues to provide leading industry practitioners
programmes, must not divert attention from the longer- with insight and product developments in the world of
term objectives of energy security and environmental energy and commodity markets.

protection. Uncertainty about future climate policy
remains one of the greatest risks which investors in the
power sector currently face.
The energy challenges we face are growing in size and
complexity. For this 2009 edition of WorldPower, Eurex
have sought to highlight three areas in which our
initiatives foster more effective and efficient energy
business practice: The development of emissions trading
and the offset between carbon markets and traditional
financial derivative markets; counterparty credit risk
mitigation; and improved news and data related services.
Emission trading is an important and efficient
instrument to limit greenhouse gas emissions. The EU
Emission Trading Scheme has grown rapidly to a trading
volume of 3.1 billion tonnes of CO
2
allowances in 2008,
equivalent to €67 bn. With the US, Australia, Japan and
Mr. Peter Reitz
others introducing cap-and-trade schemes in the near
Board Member, Eurex Frankfurt AG
future,itisconceivablethatCO
2
tradingwillreachlevelsto Eurex are the principal sponsors of
surpass that of trading in many traditional commodity
WorldPower 2009
products in the medium-term.
Recent turmoil in financial markets, with bank defaults Eurex is one of the world’s largest derivatives exchanges and the leading
andbailouts,hasrightlyfocusedattentiononcounterparty
clearing house in Europe. Eurex recently launched four new commodity
risk and brought into prominence a subset in derivatives:
index futures based on the Dow Jones-UBS Commodity Index
SM
as well
Centrally Cleared Derivatives, which are transactions
as the three sub-indexes (agriculture, energy and industrial metals).
tradedbilaterallyandbroughton-exchangetobenefitfrom
These commodity index futures extend Eurex’s existing suite of gold and
emission rights derivatives in the commodity segment, bringing new
central counterparties like Eurex Clearing and thereby
hedging and trading opportunities to financial players as well as a new
mitigating counterparty risk. This trend towards centrally
tool to diversify their portfolios.
clearedderivativescanonlycontinue.Ithasmajorbenefits
for institutional investors in terms of obtaining more
www.eurexchange.com
competitive pricing, position offsets, improved collateral
management, the ability to enter and exit positions easily
and probably most important, mitigation of counterparty
risk through the clearinghouse.
4 worldPower2009
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