German stock exchange's energy branch EEX cashes in on climate action

The operator of Germany's stock exchange, Deutsche Börse Group, is profiting from increasing climate action activities through its energy trading branch EEX, the newspaper Tagesspiegel reports. EEX, which carries out trade with electricity and CO2 emissions allowances, has been Deutsche Börse's best performing segment, the company's CFO Gregor Pottmeyer said at the presentation of Deutsche Börse's annual report 2019. The company's market share in the European power trade has grown from 10 to 40 percent since 2015 and market shares in the U.S., where Deutsche Börse bought the national power exchange in 2017, have also increased rapidly. "We will keep on profiting. As the operator of Europe's largest CO2 allowance exchange, we know how to couple market incentives with a climate strategy," Pottmeyer said. EEX's earnings before interest payments and taxes grew by 17 percent in 2019 to 138 billion euros out of roughly one billion euros in total profits for the Deutsche Börse Group, the article says.

Deutsche Börse has an interest in weaning listed German companies off fossil fuels and promoting a smooth transition to a decarbonised economy and a more sustainable financial system, as disruptive developments associated with global warming and climate policy could wipe billions from the portfolios of its most valuable companies. EEX is looking to expand its carbon trading activities beyond Europe and in 2017 announced a strategic partnership with China's Beijing Environment Exchange (CBEEX) to jointly develop the world’s largest carbon trading market.