Automated Credit Exchange Marks Record Highs in Emissions Trading
26 April 2000
Automated Credit Exchange Marks Record Highs in Emissions Trading: More Than $4 Per Pound of NOx Pollution
PASADENA, Calif.--April 26, 2000--Prices to Record Highs in ACE Market:
Limited Supply of Credits, Booming Economy
The Automated Credit Exchange (ACE) reports that the value of RECLAIM trading credits for nitrogen oxide (NOx) emissions reached record highs of $4.23 per pound in ACE's most recent electronic market -- jumping nearly 100 percent from January and soaring more than 20-fold over prices just two years ago.
The increases, tracked through ACE's sophisticated electronic market exchange system, stem from a shrinking supply of emissions credits coupled with a significantly increasing need as companies face stiffer emissions reductions requirements.
ACE's electronic marketplace, originating from core research developed for NASA via the Jet Propulsion Lab, has become the dominant tool for Southern California businesses to cost effectively meet their emissions reductions requirements through the RECLAIM program. RECLAIM, established by the South Coast Air Quality Management District (SCAQMD), sets tough, yearly emissions reduction goals for industry, but allows companies flexibility to meet those goals by obtaining or providing "surplus" emission credits -- credits for reductions beyond yearly requirements.
"These dramatic price increases underscore how much of a seller's market this has become," noted Verne Wochnick, ACE senior vice president. "It shows how valuable credits are: companies with credits should enter the market. We have been actively encouraging our clients to look at their control options first to reduce emissions to see if that's a more cost-effective strategy, and to consider how credits could help pay for innovative emissions reductions technologies they otherwise could not afford."
The most recent price jumps for emissions show the tremendous interest in and need for the equitable, sophisticated system ACE provides. Buyers and sellers can develop intelligent, complex scenario planning for their business growth, looking several years into the future and making decisions about what emissions reduction strategies to follow. RECLAIM trading credit prices now equal more than $8,000 per ton of NOx -- and are approaching the cost of emissions controls for many companies. In the near term, ACE expects that emission prices will continue to increase.
On Earth Day ACE celebrated its fifth year of trading operation. In that time it has grown at a rate rivaling or exceeding the tech market to become the dominant exchange in the RECLAIM market, helping companies trade tens of millions of pounds of emission credits. As the nation's oldest Internet, business-to-business exchange, ACE has also developed a successful business where other firms have faltered.
"We're proud of our five-year track record providing businesses and government with a sophisticated, market-based environmental tool," added Dr. Anne Sholtz, president and chief executive officer of ACE and one of the theoretical developers of the core program. "Our electronic market system provides the infrastructure that makes cost-effective emissions credit exchanges possible -- guaranteeing the credits exist, assuring their delivery and establishing their value. It brings the sophistication needed to deal with a complex problem. Given the state of emissions challenges the world is now facing, from urban smog to greenhouse gases, we only see the need for this tool to grow."
The Automated Credit Exchange (ACE) is the world's first and leading electronic exchange designed for trading environmental emissions credits. It operates the nation's leading marketplace for air pollution credits in Southern California based on core "smart" market exchange software accessible via the Internet. To learn more about ACE, call 800/615-1504.