C+ Price Methodology

Price assessment methodologies followed by C+

bid-offer-close methodology of EUA.


Basis

C+’s bid-offer close methodology is based on over-the-counter (OTC), brokered prices. Every day, active brokers and traders in the EU emissions trading scheme supply market information at close of market to C+.

Each broker acts with the permission of their corporation or trade desk. The brokerages act independently from each other and the information they provide is confidential.

The information they provide is confidential and held by C+. The data is not circulated outside C+ and is used solely for compiling the market assessment inorder to be published on C+' website.

Time of assessment and verification
C+' closing price reflect the best bid and the best offer at 23:00 Indian Standard Time (IST) exactly.C+ volunteers then contact as many of the most active traders in the market as possible each day, usually about five, to verify that the bid and offer is firm and executable. The traders are required to act in complete independence when confirming the numbers submitted by brokers.

C+ may discard any information at their discretion which they consider unconfirmed or unrealistic. They may also discard bids and offers that they believe is trading away from the market.

Bids and offers and lot size
All bids and offers must be firm at 2300 IST and be of a minimum lot size of 5000 allowances. All bids and offers must be open and available to any reputable and creditworthy counterparty, although C+ recognise that national legislation may prohibit companies from trading with certain counterparties. Such counterparty issues will be dealt with on a case-by-case basis.

Illiquid contractsIn the case of illiquid contracts, where no firm bids and offers can be ascertained at 2300 IST,C+, when assessing the closing price, will take into account the previous relationship these contracts have had with a more liquid counterpart. Consequently, the market structure will be taken into account when formulating the best bid and offer in the absence of any firm indications at the end of the day. In the unlikely event that there is no bid or offer indications throughout the day, the closing price will remain unchanged.

Timing
Currently C+ tracks the price of EU allowance contracts for spot delivery and contracts delivery on 1 December 2008-2012.

Price

The price refers to one EU allowance, equivalent to one metric tonne of carbon dioxide emissions.