BlueNext

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BlueNext
BlueNextlogo.jpg
Headquarters Paris
Key People Serge Harry, Chairman and CEO; Jean-Pierre Hort, deputy CEO
Products Carbon exchange
Website www.bluenext.eu/

BlueNext, formerly PowerNext, is a European carbon exchange that offers spot and futures contracts on European Union Allowances, EUAs and Certified Emission Reductions (CERs). The exchanges is known for its spot trading of carbon but also offers futures on carbon contracts. It is majority-owned by NYSE Euronext.

NYSE Euronext (NYX) and France’s Caisse des Depots et Consignations, after failing to win a bid to run European Union permit auctions, will close Bluenext on December 5, 2012.[1]

Strategy

BlueNext is pursuing a three-pronged strategy:

  • Launch a new set of products. In 2008, alongside BlueNext Spot EUA 08-12, add BlueNext Futures EUA and BlueNext Futures CER, two futures contracts for allowances and credits. BlueNext plans to launch BlueNext Spot CER, a contract on Kyoto credits (depending on the possibility of linking Europe to the International Transaction Log, which connects all national registries). It also intends to develop a range of environmental products on other underlyings, such as weather derivatives.
  • Extend the business to Asia and North America. NYSE Euronext’s international network of marketplaces and members will give BlueNext a decisive advantage in setting up a global market to address the planet-wide issues arising from the Kyoto Protocol and regulatory developments in North America and Asia.
  • Reach a global clientele in the energy and financial communities.[2]

History

BlueNext was formed in December 2007 when NYSE Euronext and Caisse des Dépôts purchased the carbon market from Powernext. Powernext still operates its electricity market separately. BlueNext owns 60 percent and Caisse des Dépôts the other 40 percent.[3]. In October 2008, BlueNext CEO Andrei Marcu, left the company. [4]

In June 2009, BlueNext signed a partnership agreement with the China Beijing Environmental Exchange (CBEEX) as a first step towards greater cooperation between the two companies.[5] Under the deal, BlueNext will link to CBEEX's database of Clean Development Mechanism (CDM) projects, that could then be sold on BlueNext to European and U.S. buyers.

No launch date was given for the partnership but BlueNext announced in September 2009 that it was forming a carbon market standard for China, a move that could bring investments from Chinese and international investors looking to offset their carbon emissions. The move would create a voluntary carbon standard for CBEEX.[6]

BlueNext allegedly was the target of a Value Added Tax (VAT) "carousel fraud" in May 2009, which involved entities or individuals buying carbon credits in VAT-free countries, charging the customer VAT and then selling them on BlueNext without paying the French VAT. Volumes on the exchange jumped dramatically, allegedly driven by BlueNext participants trading on BlueNext. French authorities' solution was to exempt carbon permits from the VAT.[7]

Other countries followed suit in July 2009, with the UK government introducing legislation that would also remove VAT from carbon credits.[8] The Netherlands applied a reversed charge approach to CO2 trading, which means the buyer, not the seller is responsible to pay the VAT.[9]

Products and Services

The exchange offers spot EUAs, CERs and launched EUAs phase 2 EU ETS on Feb. 29, 2008. BlueNext launched EUA futures on Apr. 21 and plans to launch CER futures as well.[10] Trades are cleared on LCH.Clearnet.

On June 18, 2009, NYSE Euronext announced that BlueNext would partner with the China-Beijing Environmental Exchange (CBEEX), the first state-level Chinese environmental rights trading platform, to set up an international carbon-trading related information platform.[11]

The exchange competes with several other carbon markets, primarily European Climate Exchange, Nord Pool, European Energy Exchange and Green Exchange.

Key People

  • Chairman and CEO, Serge Harry
  • Deputy CEO, Jean-Pierre Hort
  • Marketing & Communications Director, Keiron Allen
  • Business Development Director, David Rapin
  • Sales Director, Philippe Chauvancy

References

  1. NYSE Euronext to Shut Carbon Market After Failed Auction Bid. Bloomberg.
  2. Bluenext Strategy Plans. BlueNext.
  3. NYSE Euronext and Caisse des Dépots launch BLUENEXT. BlueNext.
  4. CEO of French CO2 exchange BlueNext leaves company. Reuters.
  5. NYSE Euronext Q2 2009 Earnings Call Transcript. Seeking Alpha.
  6. China, BlueNext form standard to build CO2 market. Reuters.
  7. Carbon credits hit by carousel fraud. FT.
  8. UK Governent To Remove VAT From Emissions Allowance Supplies. Dow Jones.
  9. Traders call for EU response to carbon tax fraud. Reuters.
  10. BlueNext Futures EUA launch on 21 April. BlueNext.
  11. World's Biggest Carbon Offset Exchange Comes One Step Closer To Reality As NYSE’s BlueNext And China-Beijing Environmental Exchange Sign China Partnership. exchange-handbook.co.uk.
Last modified on 28 July 2016, at 04:29