Simon Clinch: Hi. Thanks for taking my question. I was wondering if you could just talk a bit more about the environmental products business, and just how that’s progressing right now. And so what it’s going to take or when we should start to expect to see the growth rates really resume the kind of attractive pace that we saw in previous years prior to last year.
Benjamin Jackson: Thanks, Simon. This is Ben. As you know, we’ve been thinking about this space for well more than a decade and investing in it. And we feel great about the positioning that we have here, and we’re just continuing – continue to be one of our most significant areas of investment across our futures business because we see that the world is going to continue to have this dynamic of moving towards a cleaner energy environment. That road is going to be bumpy. And the fact that we can enable customers to have on that journey a complete suite of products across oil, gas, power and environmentals, that positions us in a very unique way to help our clients in one place be able to do all of that. On the – how the performance of the business itself, we feel good about it.
You got to remember, in particular, in Europe, there were some headwinds, obviously, last year, both in energy and in the environmentals sector with the unfortunate war in Ukraine. We continue to watch the health of those markets. Obviously, our energy markets have come back very strong. And we continue to monitor both open interest trends as well as market data subscriptions within our environmental complex, which is at a record. We’re looking at – we continue to look at active market participants. That continues to grow in our environmentals. So underneath the covers, it’s a very strong market. We have 98% market share of the EUA market space and of what’s traded at 96% in North America. So all that underneath the covers is really good.
There’s some natural tailwinds I mentioned last quarter as well within the European market itself, where a little less than 40% of the sectors in the European economy are required to basically price emissions. And with Fit for 55 coming in place, by 2028, there’s another close to 40% that are going to be captured such as maritime roads, buildings. So this is all secular growth drivers towards our European business. Our North American business continues to grow in terms of market participants. I mentioned in my prepared remarks, we just recently launched a new Washington carbon program, and we’ll be launching later this quarter an Alberta carbon trading program. So it’s another area of investment. Another area that we’ve been thinking about and have been ahead of actually shows up in our oil business, but it’s also really environmentally oriented.
And that’s the high demand for low-carbon fuels. We’ve been ahead of this, and we’ve launched contracts called RIN futures. And what these are is basically every year, the EPA sets standards, in other words, guidelines for the amount of renewable fuels that need to be blended into transportation fuels each year so that you can create sustainable jet fuel, renewable diesel when we’re filling up our cars, putting clean unleaded fuel into our vehicles. To meet this target, there’s a certain amount of production of renewable fuels that are produced, and those get renewable identification numbers. These are bought, sold and traded historically but in a very opaque market. We launched futures on this as a much more efficient way to do this and we continue to see this grow in open interest as well as ADV very rapidly.
It’s one of the highest growth areas in that other crude and refined reporting line that we mentioned in our prepared remarks. And today, in the last 12 months, we saw roughly 20% to 25% of the physical market under the EPA mandate trading via our futures. And as futures markets mature, they oftentimes trade a multiple of what the physical market is. So it’s another area across our portfolio where we’re focused on the environmental space. We’re looking ahead, and we’re seeing some nice growth.
Operator: Thank you. The next question today comes from the line of Kyle Voigt from KBW. Please go ahead, Kyle. Your line is now open.
Kyle Voigt: Hi. Good morning. Just regarding the elongated sales cycle you mentioned again this quarter, we’re seeing some competitors that have also experienced a similar dynamic, but other competitors, including one including one that reported this morning, noted that they’re not seeing that elongated sales cycle in their enterprise data business. I guess I just want to hear whether you think there are any competitive share shifts that are occurring in that Fits business that you can see, or whether the slower growth is really entirely driven by the macro environment that we’re in. And then also, if you could give some commentary as whether you’re seeing any light at the end of the tunnel there in terms of inflections that you’re hearing from clients that we may be getting to a better sales cycle environment as we head into 2024.
