ICE details staff cuts at Chicago Climate Exchange

Tue Nov 2, 2010 12:47pm EDT

Related Topics

* CCX staff to be cut by 40 by end 2010, more in 2011-CFO

* Cuts spell demise of CCX after stalled U.S. cap-and-trade

By Nina Chestney

LONDON, Nov 2 (Reuters) - Intercontinental Exchange Inc. (ICE.N) is shedding some 40 employees from its U.S. environment bourse Chicago Climate Exchange (CCX) by the end of the year, with further cuts in 2011, ICE's chief financial officer said. "We had about 66 people when we bought the company. I think we'll be closer to 25 by the end of the year. And then we'll reduce further into the first quarter," Scott Hill told a conference call following a company earnings update this week.

The futures exchange group reported a stronger-than-expected 15 percent rise in quarterly profit on Monday. [ID:nN01250667]

Industry sources told Reuters in August that ICE had started to make layoffs at CCX in July due to the lack of U.S. action on climate change. [ID:nLDE6791WI]

Voluntary carbon market players said activity on CCX has virtually ground to a halt after a U.S. climate bill which outlined a national emissions trading scheme was slimmed down in July and the cap-and-trade provision was abandoned.

The CCX operates what it calls a voluntary but legally binding greenhouse gas emissions trading scheme in which companies have to meet annual reduction targets, or a cap. Those below the targets can sell surplus allowances or bank them.

ICE bought Climate Exchange plc, which operated the CCX, the European Climate Exchange (ECX) and the Chicago Climate Futures Exchange (CCFE), in April for 395 million pounds ($634.5 million), despite failed UN climate talks in Copenhagen last December and a lack of U.S. action on climate change. [ID:nLDE63T0CE]

ECX and CCFE are separate entities and continue unchanged, said an ICE spokeswoman.

When ICE took over CCX, Sprecher said there would be a consultation period with CCX members over what to do with the "loss-making business". He was cited on Tuesday as saying participants in the CCX's cap-and-trade scheme wanted to pull out. [ID:nSGE6A102O]

Last month, CCX said it would replace its pilot emissions trading scheme with a registry to process offset transactions for 2011 and 2012. (Reporting by Nina Chestney; Editing by Sue Thomas)

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