Intercontinental Exchange (ICE) has been re‑appointed by the UK Department for Energy Security & Net Zero to host the UK Allowance (UKA) auctions for the country’s Emissions Trading Scheme (ETS) through 2028, extending the exchange’s role as operator of the UK’s most liquid environmental market.
The UK ETS, launched in January 2021 after the UK left the EU ETS, covers emissions from industry, power generation and aviation. ICE has run UK carbon auctions since 2012 and UKA auctions since 2021, making it the long‑standing partner of the UK government for carbon pricing. The re‑appointment signals continued confidence in ICE’s technology platform and market‑making capabilities and positions the exchange to capture further opportunities as global carbon pricing expands.
ICE’s Q3 2025 results provide context for the significance of the contract. Adjusted diluted earnings per share rose to $1.71, beating analyst estimates of $1.62 by $0.09 (a 5.6% beat). Net revenues were $2.41 billion, slightly below the $2.44 billion consensus, a 1.2% miss, but still a 3% year‑over‑year increase. The adjusted operating margin held at 59%, reflecting strong pricing power and disciplined cost management. In the quarter, ICE returned more than $1.7 billion to shareholders, including $894 million in share repurchases, underscoring its commitment to capital allocation.
The UK ETS contract adds a predictable, multi‑year fee stream that diversifies ICE’s income beyond its traditional derivatives and fixed‑income markets. While the exact value of the auction‑related fees is not disclosed, the extension through 2028 provides a stable revenue base that complements ICE’s growing environmental markets segment, which recorded a record number of contracts traded in 2024. The contract also reinforces ICE’s competitive moat in the environmental markets segment, where it competes with a limited number of global exchanges.
CEO Jeffrey C. Sprecher said the re‑appointment “reinforces our leadership in environmental markets and demonstrates the UK government’s confidence in our technology and market‑making capabilities.” CFO Warren Gardiner added that the contract “strengthens our long‑term growth strategy and provides a reliable revenue stream that supports continued investment in our core businesses.”
The re‑appointment comes at a time when the UK ETS market is experiencing price volatility driven by power demand and macroeconomic factors. ICE’s continued stewardship is expected to help stabilize auction operations and support the broader transition to a low‑carbon economy. The contract’s alignment with ICE’s strategic focus on data, technology and market infrastructure positions the exchange to benefit from the expanding global carbon pricing landscape.
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