SENDECO2, a project envisaged and led by Mr. Javier Tordable-Parcerisa, former executive at the German Stock Exchange and Swiss German derivatives market (Eurex), and more recently, Chief Executive Officer of the leading Spanish Government secondary market operator, MTS Spain - will go live in January 2005 with the objective of contributing significantly to the improvement of the European Natural Environment.

SENDECO2 will provide the benefits of current financial markets and international exchanges, namely Equality, Transparency, Liquidity and Efficiency, to the future trading of Carbon Dioxide Emission Rights between industrial plants in Spain and subsequently to other E.U. countries, providing participants with an easy, safe and efficient trading tool which fosters a higher and better exchange of Emissions Rights amongst participants.

As of January 2005 SENDECO2, Spanish abbreviation for “Carbon Dioxide Emissions Rights Electronic Trading System”, will provide industrial plants with an internet-based trading system. This tool, in the light of the recently approved legal framework (European Directive and Local National Allocation Plans), will allow uninhibited trading of Emission Rights in an efficient, safe, transparent and fair manner.

It is planned, that the system will progressively include other E.U. countries as to quickly achieve a truly pan-European emission rights market place.

Potentially, more than 1000 plants, once they are accepted as SENDECO2 participants, will be able to access simultaneously and anonymously Carbon Dioxide Emission Rights firm prices that will be quoted by SENDECO2 participants, thanks to which, both, the real time price formation and discovery, and the efficient entry of Buy and Sell Offers and Orders will be guaranteed.

SENDECO2 will improve the Spanish and eventually the European CO2 Emission Rights market by making it accessible to all participants who, when offering real executable prices, will foster the efficient and transparent exchange from plants that have a surplus to those that have a shortage.

To guarantee the suitability of the trading rules and the market governance, a Market Committee will be created -formed with the semester most active participants – that will propose and ratify all market rules that concern the trading activity in SENDECO2.

Benefits for all

• Single access point to follow the emission right market and to contact all participants at the same time.
• Access to real, firm and executable prices transparently, formed by the free interaction of all market participants.
• Prices during all trading session, guaranteed by “Specialists” liquidity providers
• Safe, Easy and Efficient trading
• Confidentiality Guarantee (when the contract is closed the counterparty is revealed)
• Price and Quantity Historic Statistics and Reports
• Market Governance lies in participants through the Market Committee
• In the near future, automatic settlement with the Emission Rights National Registry

• Market transparency and avoidance of fragmented market
• Avoidance of single participant market manipulation
• Continuous Pricing for a given country emission right
• Access and equal conditions for all market participants guaranteed
• Market trend and evolution monitoring capabilities
• Comparison with other European Union countries markets possible
• External and Internal statistics, aggregated or by participant
• Ultimate increase of the emission right trade and its liquidity

• Better control of the overall carbon dioxide emissions in our atmosphere
• Better monitoring of compliance with the Kyoto Protocol established limits

A contract will be automatically closed when a participant submits an execution Order on an actual market Offer, or when two Offers (of opposite side, Buy and Sell) cross each other when reaching a certain price level. The continuous Buy and sell Offer submittal will be promoted by creating a participant category “Specialist” that will commit itself to provide liquidity by inserting firm Offers during the trading session.

General characteristics that will rule trading at SENDECO2 from January 2005:

• Transparency - All prices and quantities offered by participants will be accessible to all market participants simultaneously.
• Anonymity – The price formation and discovery will be anonymous as well as the trading and matching of contracts. Once a participant has closed the deal, the counterparty will be revealed to him. The deal will be also revealed to the general market, but not the counterparties involved.
• Equality – All participants will enjoy the same access conditions guarantying the Offer and Order entry fairness based on Price and Quantity at all times. Furthermore, all participants will be eligible to be part of the Market Committee, which will establish the basic market rules.
• Multilateral – All participants will be able to access simultaneously and anonymously to the market view trading activity and be able to close a trade with any of the market participants. Additionally, each participant will have the possibility of trading with a single in a bilateral segment
• Efficient – Initially, settlement of all contracts closed at SENDECO2 will have to be performed by participants themselves by directly transmitting the contract details to the future Emission Rights National Registry of which both counterparties must be members of. At a second phase, and in order to make the settlement process more efficient and to automatic, it will be formally asked to send such communication directly by SENDECO2 on behalf of participants .

The system architecture used is a Client - Server, based on a TCP/IP communication protocol, with a sound back-up structure, ensuring redundancy at all times. All Offers, Order, Prices and trading will be properly stored in a server.

The philosophy that lies in our electronic platform is that maximization of distribution thanks to Internet is compatible with a system that is light, robust, efficient and accommodates high data transmission traffic.

By using Internet as communication channel, each participant must liaising with and ISP and individually attain the internet access that best suits its needs. Evidently, those who want to have faster connection to Internet will have better performance.

The minimum technical requirements for participants will be; ADSL 256K, Windows 2000 or above Operative System, Pentium 3 or above, 500 MHz or above.

In the coming weeks, and for those users that previously have registered in our Web site at reg@sendeco2.com , will be able to test our software downloading it to their work stations.

• Comply with the minimum technological requirements
• Be members of the Emission Rights National Registry
• Be admitted by the Market Committee
• Assume all the system and trading rules established by the Market Committee of SENDECO2
• Satisfy diligently the membership fee (annual) and Transaction fee (for each contract closed).