LEBA Carbon EUA Index Specification: 08.00 – 10.00am

Price Calculation Methodology

The index price will be calculated every trading day using the volume-weighted average of EUA trades transacted by LEBA firms for physical delivery on 1st December 2008, 1st December 2009 and 1st December 2010 between 8.00am and 10.00am.

If other delivery dates, such as immediate delivery, become liquid then these will be also calculated in addition to the dates above.

For the purposes of these indices, trading days are every day except Saturday, Sunday, New Years Day, Good Friday, Easter Monday, Christmas Day and Boxing Day.

Index Publication

LEBA firms will submit their trades to LEBA and to Reuters at the end of every trading day for calculation.

Firms will not include details of the counterparties involved, only the price, volume and time of each trade.

The index price will be published on Reuters at 18.00 London time on the London business day of the trading day, and may be published on the LEBA website on or after that time. Reuters will not publish on non-Target business days, but will publish the index on the next London business day.

Sleeves

If a company does a free sleeve to help two other companies who would not otherwise be able to trade with one another, then this would only count as one trade for the purposes of the index. A free sleeve is defined as buying and selling the same volume at the same price between two companies as a favour to those other companies. If a company charges to do the sleeve, i.e. they buy at a lower price than they sell, then this would count as two trades for the purposes of the index.

Number of trades required to set the index

A minimum volume of 1,000 tonnes must have traded in each product in order to set the index. If less than 1,000 tonnes trades then that day will be treated as if there were no trades.

Contingencies

Before calculating the Carbon EUA Index, Reuters (or whoever is calculating the index), shall verify if all the contributing firms have made their data available for that day in accordance with the established procedures.

If one or more of the firms have failed to provide data to Reuters by 17.30 London Time, they (or whoever is calculating the index) shall use their reasonable efforts to contact such firms by telephone and e-mail and remind them of their obligation to provide the data. Reuters will contact these firms again at 17.45 on the same business day.

If by 18.00 London Time on the day same trading day, Reuters has received data from a minimum of three brokers, or 50% of contributing firms (rounded up), then it shall calculate and publish the index, making a note on the publication page of the number of firms who provided data.

If less than that number of firms provide data, Reuters will inform LEBA by telephone and e-mail at 18.00 on trade date. LEBA will determine both what is published and the accompanying message.

Treatment of days with no trades

If there are no trades on a product then the published index for that day will remain unchanged from the previous day.

For the avoidance of doubt, quoted spread prices between products will not be used to evaluate the index value for products where no trades have taken place.

If a calendar or other spread is traded then the two traded legs of the spread will be treated as two separate trades and both will be used in the calculation of their respective indices.

Trades to be included in the index

For a trade to be included in the index it must occur on a trading day between 08.00 and 10.00 London time, on the trade date. All trades including Private and Confidential Trades (P&C) will be included in the index.