The completion last month of the first cash-settled forward trade on EU CO2 allowances is a big advance for the European emissions trading market (EU ETS). GreenStream Network (GSN) brokered the trade between counterparties Dresdner Kleinwort Wasserstein and Sampo Bank of Finland.
Forward trades on EU CO2 allowances were settled by the physical delivery of a specified amount of EU allowances from a seller to a buyer. This transaction, for a large volume of allowances at an undisclosed price, is the first time a EU CO2 emissions trade has been settled in cash, giving companies affected by the EU ETS a hedging tool against excessive CO2 movements.
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