Ece

European Climate Exchange

The Carbon Market:

Opportunities in a Growing Industry

LSE, 6th March 2009

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About ECX: Europe’s leading Carbon Exchange

Climate Exchange PLC

(CLE)

European ClimateExchange (ECX)

Chicago Climate Exchange (CCX)

Chicago ClimateFutures Exchange

(CCFE)

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Carbon – The Next Asset Class

Obama cap-and-trade quotes in 2009:

“We would put a cap and trade policy in place that is as aggressive if not moreaggressive than anyone out there”

“If somebody wants to build a coal-powered plant, they can. It's just that it willbankrupt them.“

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Emission Trading – A Growing Market

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* Source: ECX / ICE, MMT Energy. Data based on 2007 traded volume across major global commodity exchanges and excludes OTC volume.

“Market Churn”Ratio of Trading Volume / Physical Volume *

EU ETS trading volumes have grown roughly 106% annually between 2005 and 2008…

But carbon is still young compared to other commodity markets and has significant growth potential…

Exchange Traded Carbon Volume(in MM tons C02)

Source: Core Carbon group. Disclaimer: Cannot be reproduced or used without the express consent of Core Carbon Group. Core Carbon Group not responsible for inaccurate or incorrect information.

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Price and volume – ECX Contracts• 94 million tonnes of CO2 traded in 2005 with a market value of €2.1 billion• 452 million tonnes of CO2 traded in 2006 with a market value of €9 billion• 1 billion tonnes of CO2 traded in 2007 with a market value of €17.5 billion• 2.8 billion tonnes of CO2 traded in 2008 with a market value of €51.3 billion

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Who is the Carbon Market?

Hedgers

Speculators

Arbitrageurs

Investors

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Where Next?

US ETS5,760Mt

EU ETS2,080Mt

Aus ETS445Mt

NZ ETS100Mt

Japan ETS Voluntary

China?Canada ETS400Mt

CERs bridge theRegional Schemes?

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Thank You for Listening!

Sara StåhlDirector of Market Development

European Climate Exchange (ECX)

Tel: +44 (0)20 7382 7804Email: [email protected]: www.ecx.eu