New Zealand, Australia carbon brokerage rivalry builds

Commodities broker Marex announced today it opened an office in New Zealand and launched a new carbon trading platform for local emissions units, days after New Zealand competitor Jarden rolled out its own trading platform in Australia.

Marex will initially focus on execution and clearing services across carbon, electricity and dairy sectors in New Zealand, in both listed and over-the-counter products. Its New Zealand-based and global clients will also be able to trade New Zealand emissions units (NZUs) in a newly launched platform called Neon Carbon.

New Zealand clients will have access to clearing directly through Marex on the Singapore Exchange and Australian Securities Exchange, with the latter planning to soon launch physically settled futures contracts for Australian Carbon Credit Units (ACCUs), large-scale generation certificates (LGCs) and NZUs.

The new Marex team will be led by Nigel Brunel, formerly Jarden's head of commodities in New Zealand. Jarden is considered to have the biggest share of the brokered NZU market through its CommTrade spot trading platform, followed by domestic trading platforms CarbonMatch and emsTradepoint, which is operated by state-owned electricity transmission system operator Transpower New Zealand's Energy Market Services.

CommTrade expansion

Marex has hired several other former Jarden brokers in recent months in New Zealand and Australia, as it looks to expand its environmental products business across Asia-Pacific.

But the increasing brokerage competition in Australia with growing trading volumes for ACCUs in recent years prompted Jarden to roll out CommTrade in the Australian market. Jarden's clients in Australia had until now only a price display mechanism for ACCUs. But they are now able to directly input bids and offers through CommTrade, with real-time matching capabilities displayed on screen.

"Transactions remain anonymous until matched, after which clients receive a contract note from Jarden detailing settlement terms," Jarden announced late last week. All transactions are settled directly through the company, with clients also able to trade other products such as LGCs.

Marex told Argus it would not be able to share any product details on Neon Carbon at this stage.

UK-based broker Icap entered the New Zealand carbon trading market earlier this year with the acquisition of domestic brokerage firm Aotearoa Energy, while several other brokers have entered the ACCU market in recent years.

By Juan Weik