Certificate markets exist because a regulator created an obligation and a tradable proof of meeting it. What they usually lack is a price. Trades are arranged bilaterally, reported late if at all, and the “market price” is an average of what brokers said they saw. A scheduled call auction replaces that with a clearing price the whole market watched form.
A certificate is a row in a registry: an issuing body creates it against a verified megawatt-hour, a tonne of carbon, or a unit of measured energy saving, and retires it when someone uses it to discharge an obligation. The registry is very good at recording who holds what. It has no opinion at all about what it is worth.
An obligated party calls two or three brokers, takes the best of the quotes it happens to receive, and the trade is reported — or not — into a price-assessment process. Identical certificates of the same vintage trade at materially different prices on the same afternoon, and nobody involved can prove they got a fair one.
Compliance auctions are real, and they are frequently sealed bids collected by email, opened in a spreadsheet, and allocated by a formula a small team applies under time pressure. It works. It is also unreviewable in any meaningful sense, and it can only be run occasionally.
“One certificate” hides vintage, technology, region, issuance year and eligibility for a particular scheme. When those attributes are not part of the traded instrument, buyers price the worst case and sellers of good paper subsidise sellers of bad.
Someone is watching for double counting, for retirement that never happened, and for the market abuse that follows any instrument created by policy. They will ask what happened at a particular moment months later, and the honest answer is usually a reconstruction.
A call auction is the right mechanism for a market that trades in bursts around compliance deadlines. It concentrates every willing buyer and seller into one moment, publishes an indicative price while the book fills, and clears everyone at a single price.
The engine examines every price at which bids and offers overlap and uncrosses at the one that trades the greatest volume, breaking ties on minimum surplus and then on proximity to the reference price. Everyone who trades, trades at that price. There is no better fill for the participant who called the right broker.
Participants watch the equilibrium price move as orders arrive, which is what turns a sealed bid into price discovery: a party that sees the price forming against it can still improve its order before the uncrossing.
Vintage, technology, region and scheme eligibility stop being footnotes and become the definition of a separate instrument with its own book and its own price. That is more instruments to administer and a far more honest market — good paper stops being priced as though it were bad.
Every accepted order and every operator action is journaled in one gap-free sequence before it executes. Answering “why did this clear here” is a replay that reproduces the same result exactly, not an argument between two spreadsheets.
Iceberg orders display a peak and hide the remainder, but the entire volume — hidden included — contributes to auction price discovery. A utility can bring real size to the call without signalling it.
The auction mechanics and the evidence. Certificate markets buy the audit trail as much as the matching, which is the one thing about Mehrex that was never a marketing decision.
| Setting | Typical starting point |
|---|---|
| Instrument | One per certificate class, vintage and scheme eligibility |
| Lot size | One certificate, or a round block of them |
| Sessions | Scheduled call auction — weekly, monthly, or on the compliance calendar |
| Order types | Auction, Limit and Iceberg; Market orders admitted or not, by policy |
| Price formation | Uniform price at maximum executable volume |
| Operator controls | Four-eyes approval on calendars, instruments and manual transitions |
| Settlement | Netted cash; certificate transfer effected in the registry |
Auction sessions scheduled at market or instrument level with per-day overrides, a continuously disseminated Indicative Equilibrium Price, and an Auction order type that outranks other priced orders in the call.
Read more →02 · channelThe auction calendar, instrument definitions and eligibility administered in a browser under maker–checker approval, so every market-affecting action has a requester, an approver and a record.
Read more →05 · post-tradeEach trade stamped with its matching type — auction uncrossing is distinguishable from continuous trading — netted per participant and per settlement date, with fees computed per trade.
Read more →04 · corePosition and notional limits per participant, so an obligated party cannot bid for more than it is accredited or funded to take.
Read more →Mehrex can run the auction. It cannot issue a certificate, transfer legal title to one, or verify that the megawatt-hour behind it was ever generated. In a certificate market, that is where most of the risk lives.
Ownership of a certificate changes in the registry, not in the engine. Mehrex produces enriched trade-capture records naming the parties, the instrument and the quantity; something you build has to turn those into registry instructions, confirm they settled, and handle the case where they do not. Until that integration exists, a matched trade is an obligation, not a transfer.
The credibility of the whole market rests on whether the saving, the generation or the avoided tonne actually happened. MRV, accreditation of verifiers, and the methodology behind an issuance are the scheme’s problem and a substantial institution in their own right. A liquid market on top of weak verification is a faster way to trade bad paper.
Who may bid, in which instrument, and up to what size is a policy question with a compliance answer. The engine enforces the entitlements and limits you configure; deciding who gets them, and auditing that decision, is an administrative function you have to staff.
Working out how many certificates each obligated party must surrender, tracking their progress, and processing retirement is the compliance system, and it is separate from the trading system. Most schemes already have one; it will need to talk to the venue.
Payment rails, settlement banking and default handling are yours. So is tax: certificate and carbon markets have a well-documented history of VAT carousel fraud, and several jurisdictions apply a reverse charge because of it. That shapes your participant terms and your onboarding.
Mehrex journals everything that happened, which is the raw material for surveillance rather than surveillance itself. Detecting layering, wash trades and collusion in a small market with a handful of participants needs analysis on top of the journal, and a policy for what you do when you find it.
Certificate markets are episodic — volume clusters around compliance deadlines and issuance events. A call auction concentrates that scattered interest into a single moment and clears it at one price, which produces a more reliable reference than a continuous book that is empty for most of the day. Mehrex can run either, or both, per instrument.
At uncrossing the engine examines every price at which bids and offers overlap and selects the one that allows the greatest volume to be matched. Ties are broken on minimum surplus and then on proximity to the reference price. Until the uncrossing, the equilibrium price is calculated and disseminated continuously so participants can see it form.
Yes. Every accepted command — orders, amendments, cancellations and operator actions alike — is written to an append-only journal in one gap-free sequence before it executes. Replaying that journal reproduces the same book states and the same trades exactly, including hidden iceberg volume.
Not out of the box. It emits enriched trade-capture records on the post-trade interface, which is the input a registry integration needs; building and operating that integration, and reconciling settled transfers against matched trades, is part of the implementation.
Corporate power purchase agreements — bespoke, lawyer-heavy, and out of reach for any buyer below a certain size.
Read the page →Energy & environmentalNew, sub-national and sectoral cap-and-trade schemes, where the cap exists and the market does not.
Read the page →Precious metalsAn app that sells sub-gram quantities of gold to retail buyers, run as a real order book instead of a dealer’s quote.
Read the page →A live demonstration runs about an hour: the order book, the Control Panel, an auction uncrossing, and a replay of the journal that produced it.