CME Details Plans for Its Carbon Market

By JACOB BUNGE
CME Group Inc. announced plans Thursday to launch its standalone emissions-trading exchange in the first quarter of 2010, amid continuing efforts to kick-start the U.S. carbon market.
Green Exchange Holdings LLC, a joint venture between CME and a group of banks and brokers, would take over a number of products handled by the Chicago group's New York Mercantile Exchange unit, according to a company notice.
The Green Exchange plan was launched with much fanfare in late 2007, aiming to tap what some industry observers say could become one of the largest asset classes in derivatives, driven by efforts to combat global warming.
While emissions trading is relatively vibrant in Europe, the U.S. market remains small and voluntary as Congress continues to debate a cap-and-trade plan to price and ultimately reduce the release of greenhouse gases.
The Green Exchange still requires U.S. regulatory approval, and its backers are also seeking clearance from U.K. authorities.
The rival Chicago Climate Exchange, owned by Climate Exchange PLC, runs the dominant European emissions platform.
Former Ameritrade chief executive Thomas Lewis was tapped last year as CEO of the Green Exchange, charged with building an executive team and securing additional equity partners in the venture.
The platform's current roster of products routed through Nymex include futures and options on European Union Allowances, carbon allowances tied to the Regional Greenhouse Gas Initiative, and other greenhouse gas markets.
Write to Jacob Bunge at jacob.bunge@dowjones.com