Developing biomass as a tradable fuel commodity
At present the costs of contracting for biomass fuel supplies are significant. Neither buyers, nor sellers have a firm basis on which to build their prices and estimates for this new market. Quality standards and delivery expectations are not yet clearly defined, and secondary processing operations difficult to source and verify.
To enable the market to develop and to build confidence in biomass fuel supplies, the BioXchange provides a platform where greater transparency can reduce transaction costs to all parties. The provision of suitable secondary services in certification, transport and delivery through the BioXchange will be important to successful market development
This can happen at several levels - Local, Regional and European. At each level the volumes and types of transactable biomass will change. The aim of the BioXchange is to provide an appropriate platform for increased trading of saleable biomass. The initial trading will be conducted through the European Trading Floor. As experience develops and the market expands, a wider range of trading opportunities will be developed.
Eventually, it is anticipated that standard biomass contracts will be developed to permit the trading of contract positions and ultimately the development of a full range of commodity services - futures, derivatives etc.
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