MUMBAI: The Multi Commodity Exchange of India (MCX) began live trading of carbon credit futures from Monday, a senior exchange official told media. "We are going live from today," said Joseph Massey, deputy managing director. In an interview, Massey said MCX will focus on environment products like carbon credit, along with its energy portfolio, in 2008 to boost trading. "This will be the first carbon credit futures contract to be listed in India ....as well as Asia," another senior exchange official told media.
"Further contracts with other specifications will be launched in future," said the official. The contract carbon credits - ECX-CFI Mini started trading with a contract that will expire Dec 15, 2008. The contract lot size is 200 tonnes and has a initial margin of 6 per cent. The daily price fluctuation limit is 4 per cent. Carbon credits are permits developed nations buy to meet emission obligations under the Kyoto Protocol.
Each unit of credit, which now sells at 13-15 euros, represents a reduction of greenhouse gas emission by one metric tonne. India is the world's second biggest source of the tradeable pollution permits and carbon credit revenue may touch 150 billion rupees 2012, according to Ernst & Young.
MCX has a partnership with Chicago Climate Exchange (CCX), which is run by Britain's Climate Exchange Plc, and trades in carbon derivatives, Massey earlier told media.
Analysts see this as a positive movement in commodity trading but are cautious about functionality of carbon credit futures. "India is a net seller of carbon credits, it will be interesting to see who is on the other side," said Shailendra Kumar, head of research at Sharekhan Commodities Pvt Ltd Citigroup and Merrill Lynch bought 5 per cent stake each in MCX in September 2007, valuing it over $1.1 billion, or more than that of the Bombay Stock Exchange.
MCX is promoted by Financial Technologies (India) Ltd and accounted for about 75 per cent of the total turnover of 24 Indian commodity bourses in the first 9 months of 2007/08, government data showed.
"Further contracts with other specifications will be launched in future," said the official. The contract carbon credits - ECX-CFI Mini started trading with a contract that will expire Dec 15, 2008. The contract lot size is 200 tonnes and has a initial margin of 6 per cent. The daily price fluctuation limit is 4 per cent. Carbon credits are permits developed nations buy to meet emission obligations under the Kyoto Protocol.
Each unit of credit, which now sells at 13-15 euros, represents a reduction of greenhouse gas emission by one metric tonne. India is the world's second biggest source of the tradeable pollution permits and carbon credit revenue may touch 150 billion rupees 2012, according to Ernst & Young.
MCX has a partnership with Chicago Climate Exchange (CCX), which is run by Britain's Climate Exchange Plc, and trades in carbon derivatives, Massey earlier told media.
Analysts see this as a positive movement in commodity trading but are cautious about functionality of carbon credit futures. "India is a net seller of carbon credits, it will be interesting to see who is on the other side," said Shailendra Kumar, head of research at Sharekhan Commodities Pvt Ltd Citigroup and Merrill Lynch bought 5 per cent stake each in MCX in September 2007, valuing it over $1.1 billion, or more than that of the Bombay Stock Exchange.
MCX is promoted by Financial Technologies (India) Ltd and accounted for about 75 per cent of the total turnover of 24 Indian commodity bourses in the first 9 months of 2007/08, government data showed.
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