A New Player In The North American Emissions Trading Sector

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Over the past two weeks, a couple of announcements were made that went mostly unnoticed despite their importance to the North American carbon marketplace. Firstly, on May 30, the Montreal Exchange, a derivatives exchange, announced that it was launching an emissions trading market for CO2. The Montreal Exchange is now a unit of the TSX Group (TSXPF.PK or X.TO), the firm that runs all of Canada’s exchanges. The second announcement came last week, when the premiers of Quebec and Ontario, Canada’s two largest provinces and the heart of its industrial base, announced that they were moving ahead with a cap-and-trade scheme to cut their greenhouse gas emissions. Together, these two jurisdictions form North America’s fourth largest economy, so needless to say this is a market with some potential. Now once this scheme gets underway – and it’s unclear when that will be – the TSX group through the Montreal Exchange will be the platform of choice for the exchange-based portion of the market. While that’s unlikely to be a material event for the company initially, the potential size of that market in Canada alone is nothing to frown at, and this could prove a lucrative niche in the future as Alberta continues to expand production in the dirty oil sands.

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