October 22, 2008 / 1:30 PM / 11 years ago

Nasdaq to launch energy, carbon derivatives unit

A NASDAQ screen can be seen above Times Square in New York September 29, 2008. REUTERS/Lucas Jackson

NEW YORK (Reuters) - Exchange operator Nasdaq OMX Group Inc will use newly acquired businesses from Nord Pool ASA, the Norwegian electricity exchange, to offer energy and carbon derivatives products.

A new unit, Nasdaq OMX Commodities, will use Nord Pool’s derivatives and Nasdaq’s international platform, Nasdaq said on Wednesday.

With the trading of carbon emissions gaining steam globally, Nasdaq wants to create a global leader in energy derivatives and carbon products, the exchange operator said on its website.

Standardized products on offer to financial institutions will include Dutch and German power derivatives and Nordic carbon emissions instruments. They will be cleared in house, the company said.

Companies and governments are turning to emissions trading through so-called cap-and-trade schemes as a weapon to fight pollution and climate change. Such programs set an overall emissions limit, then requires participants, often energy-intensive industries, to buy permits to emit greenhouse gases like carbon dioxide.

Nasdaq Chief Executive Robert Greifeld was quoted in a newspaper report on Wednesday as saying the company will develop standardized products for European and U.S. clients looking to manage and trade allowances for emissions such as carbon dioxide and sulfur dioxide.

He told The Wall Street Journal that most emissions trading in the Nasdaq contracts would initially be in over-the-counter contracts rather than exchange-traded products.

Also on Wednesday, Nasdaq completed its $325 million acquisition of Nord Pool’s subsidiaries, including clearing and consulting businesses.

Reporting by Shradhha Sharma in Bangalore and Jonathan Spicer in New York; Editing by Erica Billingham and John Wallace

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