LONDON, Aug 25 Reuters Intercontinental Exchange Inc ICE said on Thursday it will launch UK carbon emission allowance options on October 10, subject to regulatory approval.

Britain launched its own emissions trading system ETS last year to replace the European Union39;s ETS after it left the bloc.

Under the scheme, UK industrial firms and power plants have to buy a UK emissions allowance for every tonne of carbon dioxide they emit.

They can also sell allowances which they do not need to cover their output on the market.

ICE launched UK carbon allowance futures in May last year and it holds regular auctions of permits on behalf of the UK government.

ICE said it will list expects to list UK options to March 2024. The underlying contract will be the December UK emissions allowance futures contract for the relevant year.

Options are contracts giving a buyer the right to buy or sell an underlying asset at a specific price and date and are usually used to hedge risk.

Reporting by Nina Chestney; editing by Jason Neely

Source Reuters