Trading sustainable biomass at transparent conditions

At BiomassPool buy and sell orders from power plants and wood chips suppliers are matched in the trading trading system according to the same principles as on the electricity and gas exchanges. It creates transparent and competitive prices.

At the same time, BiomassPool, in cooperation with NEPCon, has made it easy for the plants to ensure that they comply with the industry agreement requirements by implementing standards and requirements on the energy exchange.

How to trade at BiomassPool

Submitting of orders for purchase or sale is done by logging in to the electronic trading system from the BiomassPool site.

The auction takes place once a week - the 2nd weekday of the week - (usually Tuesday).

It is possible to place order (s) from kl. 8:00 from the 3rd weekday of the week, for the auction that runs the following week.

Below are the deadlines on the auction date for buyers and sellers in relation to submitting, changing or canceling order (s). For buyers, it is possible to make changes until 9:30 and for sellers until kl. 10:00 on the auction date.

Time (Danish time) Buyers Sellers
7:00-9:30 Submitting order(s)

Cancelling of order(s)

Changing of price

Submitting order(s)

Cancelling of order(s)

Changing of price

9:30-10:00 Cancelling of order(s) Submitting order(s)

Cancelling of order(s)

Changing of price

10:00-11:00 Reduction of the price

Any purchase or sales order for a given delivery period must consist of a specified amount in tonnes. Any purchase or sales order is quoted as a price order in DKK / GJ.

Auction

The auction date is the 2nd working day of the calendar week.

During the auction which is in the period between 10:00 - 11:00pm on the actual auction date, contracts are only valid if the following conditions are met:

  1. a) The same product is bought and sold, ie. wood chips product type and delivery period matches.
  1. b) The method of assessing the amount of biomass delivered (measured by volume or weight) used on the buyer's website is acceptable to the seller, ie. coincides with the method specified by the seller at the time of the order of the order in question.
  1. c) The maximum transport distance specified by the seller is less than or equal to the distance to the buyer's trading location.
  1. d) A trade is only made if the order quantity (or the remaining amount of part of the order) is greater than or equal to the minimum amount stated in the relevant order of the other party.
  1. e) The price of the sales order is less than or equal to the price of the purchase order.

The auction expires after the "buyer auction principle", ie. Each order to be purchased matches all orders sold that meet the above conditions. The final price of the sales terms is calculated taking into account individual distances between buyer and seller, which is calculated in the trading system based on the buyer and seller's stated trading locations.

Purchase and sales orders are matched taking into account the maximum positive difference between the buyer's order price and the seller's order price. A contract is concluded based on the matched orders.

If the quantities of grouped purchase or sales orders do not match, they do not remain purchased or sold in the trading system and participate in matching other contracts as long as they are valid. If the remaining order amount is less than the specified minimum order amount, the unused part of the order will be automatically canceled. This match cycle is repeated until orders that meet terms that are mandatory for termination of the agreement are available on the market.
 

How to set the contract price:

The auction principle used means that sellers (I), (II) and (III) will fully fulfill their sales order, while the seller of the order (IV) will sell their volume in part. The sellers (I), (II) and (III) will allocate the amount of chips at the price specified by the seller (IV), ie. The buyer pays everyone sells the highest price that offers to sell (IV). It should be noted that the buyer will end up paying the price of the last seller instead of the price specified by the buyer in his own order (marked with the blue line). Note that in the illustration above, Price, Eur / toe is used. At BiomassPool, DKK / GJ is used.

Contract concluded = Trade confirmation

The conclusion of final contracts for the purchase and sale of chips takes place automatically on the energy exchange.

Contracts at BiomassPool are concluded electronically, in accordance with Exchange Trading Acts (Active Link to Exchange Documents). After the completion of an auction, contracts are automatically based on the orders made by buyers and sellers without separate confirmation from market participants. Contracts are considered to be completed from the moment the trade results are announced. Trading results are announced on the auction date between 12:00 and 15:30.

Buyers and sellers receive an e-mail including a "Trade confirmation of purchase and sale of wood chips traded at BiomassPool". There is thus no need to sign the contracts for purchase and sale.

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