The trade in Newcastle coal is set to be simplified when thermal coal futures begin trading in the third quarter of 2008.

Electronic trading platform globalCOAL and Intercontinental Exchange have announced a co-operation agreement to facilitate trade in coal futures.

The first of two new coal futures contracts to be traded on Intercontinental’s ICE Futures Europe platform will be a financially settled futures contract based on globalCOAL’s NEWC Index.

Unprecedented energy demand coupled with supply problems, has contributed to the NEWC Index price doubling over the last 12 months.

President of ICE Futures Europe David Peniket said the move will assist in building liquidity and transparency in the coal marketplace and allow coal producers and consumers to better manage price risk.

"Expanding further into the coal market is a natural extension of our global energy complex," Mr Peniket said.

"We believe that the development of traded futures contracts will help to build liquidity and transparency in the coal marketplace, and provide producers and consumers with new tools for managing their price risk," he said.

globalCOAL chief executive Eoghan Cunningham said the development of futures will open up access to investors and financial players looking for exposure in the coal market.

"The development of futures is the next stage in the commoditisation of the coal market and will provide tremendous opportunity for investors and pure financial players as well as physical coal market participants," Mr Cunningham said.

"Market feedback from traders across this spectrum strongly indicates that a futures contract settled against globalCOAL's NEWC Index will be successful in capturing liquidity."

A futures contract for coal delivered in the Antwerp-Rotterdam-Amsterdam region has been earmarked to commence trading later this year.