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Price assessment methodologies

RGGI price assessment methodology

Basis
Point Carbon’s RGGI methodology is based on over-the-counter (OTC), brokered prices. Every week, major brokers and traders in the RGGI emissions market supply price data between 16:00 and 16:30 Eastern Time to Point Carbon.  The information they provide is confidential and held by Point Carbon. The data is not circulated outside Point Carbon and is used solely for compiling the market assessment. 

Point Carbon’s closing price is the last trade that is conducted on the day of the assessment, providing that the last trade lies between the latest firm bid and offer. If the last trade lies outside of this range, the closing price will be the midpoint of the bid and offer. 

Time of assessment and verification
Point Carbon’s RGGI price reflects the best bid and the best offer at 16:00 Eastern Time. The editors may discard any information at their discretion which they consider unconfirmed or unrealistic. They may also discard bids and offers they consider to lie beyond the market bounds. 

Bids and offers and lot size
All bids and offers must be firm at 16.00 Eastern Time and be of a minimum lot size of 10,000 allowances. All bids and offers must be open and available to any reputable and creditworthy counterparty.

Illiquid contracts
In the case of illiquid contracts, where no firm bids and offers can be ascertained at 16.00 Eastern Time, Point Carbon, 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 are no bid or offer indications throughout the day, the closing price will remain unchanged.

Timing
Currently Point Carbon assesses the price of the RGGI December 2010 (v09) allowance contract.

Price
The price refers to one RGGI allowance, equivalent to one short ton of carbon dioxide emissions. 


California price assessment methodology

California ETS price assessment methodology is based on over-the-counter (OTC) brokered prices. Every week major brokers and traders in the California ETS supply price data between 10.00 and 11.00 Pacific time (13.00 and 14.00 Eastern time) to Point Carbon News. The information they provide is confidential and held by Point Carbon News.

Point Carbon’s closing price is the last trade that is conducted on the day of the assessment, providing that the last trade lies between the latest firm bid and offer. If the last trade lies outside of this range, the closing price will be the midpoint of the bid and offer.

Time of assessment and verification
Point Carbon’s California OTC price reflects the best market midpoint at 11.00 Pacific time. The editors may discard any information at their discretion that they consider unconfirmed or unrealistic. They may also discard bids and offers they consider to lie beyond the market bounds.

Bids and offers and lot size
All bids and offers must be firm at 11.00 Pacific time. Bids and offers must be open and available to any reputable and creditworthy counterparty. Contract trading has been pretty spotty so far, but brokers expect allowances to typically trade in clips of 5,000 or 10,000 CCAs at a time.

Illiquid contracts
In the case of illiquid contracts, where no firm bids and offers can be ascertained at 11.00 Pacific time, Point Carbon News, 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 closing price in the absence of any firm indications at the end of the day. In the event that there are no bid or offer indications throughout the day, the closing price will remain unchanged.

Contracts
Point Carbon News assesses the price of California carbon allowances (CCAs) in the over-the-counter (OTC) market. The benchmark contract right now is California carbon allowances for delivery in 2013 for compliance with the system in 2013 (v13).

Price and currency
The price refers to one CCA, which represents one metric tonne of carbon dioxide equivalent (CO2e) emissions. The price will be listed in US dollars.


NZU methodology

Basis

New Zealand ETS price assessment methodology Basis Point Carbon’s New Zealand ETS methodology is based on over-the-counter (OTC), brokered prices. Every week, major brokers and traders in the New Zealand ETS supply price data between 15:30 and 16:00 local time to Point Carbon.  The information they provide is confidential and held by Point Carbon. The data is not circulated outside Point Carbon and is used solely for compiling the market assessment. Point Carbon’s closing price is the last trade that is conducted on the day of the assessment, providing that the last trade lies between the latest firm bid and offer. If the last trade lies outside of this range, the closing price will be the midpoint of the bid and offer.

Time of assessment and verification
Point Carbon’s NZU price reflects the best market midpoint at 16.00 New Zealand time. The editors may discard any information at their discretion which they consider unconfirmed or unrealistic. They may also discard bids and offers they consider to lie beyond the market bounds.

Bids and offers and lot size
All bids and offers must be firm at 16:00 NZ time. Bids and offers must be open and available to any reputable and creditworthy counterparty.

Illiquid contracts
In the case of illiquid contracts, where no firm bids and offers can be ascertained at 16:00, Point Carbon, 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 closing price in the absence of any firm indications at the end of the day. In the event that there are no bid or offer indications throughout the day, the closing price will remain unchanged.

Timing
Currently Point Carbon assesses the price of spot New Zealand Units.

Price
The price refers to one New Zealand Unit, equivalent to one metric tonne of carbon dioxide equivalent emissions.

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