CME Group Launches Emissions Offset Futures Marketplace

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Stockholm (NordSIP) – CME Group, the world’s leading derivatives marketplace, announced the launch of the Global Emissions Offset (GEO) futures market. Between Sunday, February 28th, and Wednesday, March 3rd, there a total of 81 contracts from nine firms, including Macquarie Group, Hartree Partners and Mercuria during its first two trading days.

The goal of GEO futures is to help customers manage the risks associated with voluntary decarbonisation strategies. According to the CME Group, GEO futures follow similar selection criteria and review process as the ones developed for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which is already in use. “GEO futures allow for delivery of CORSIA eligible voluntary offset credits from three ICAO approved registries and are listed by and subject to the rules of NYMEX.”

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“We are excited to see early customer interest and support for the new GEO futures, which represent another way CME Group is meeting the evolving risk management needs of our global energy markets,” said Peter Keavey, Global Head of Energy at CME Group. “Demand for decarbonization continues to accelerate, and GEO futures will help to establish a global pricing benchmark for the voluntary emissions offset market, providing customers with greater optionality in managing their short and long-term emissions price risk.”

According to the CME Group, GEO futures allow businesses’ carbon emissions to be offset through emissions reduction projects vetted through CORSIA’s global, standardized framework to manage growing ESG requirements. CBL Markets, a global exchange operator in spot energy and environmental markets, partners with the CME Group to provide the delivery of offset credits and help firms onboard with approved registries for seamless delivery.

“This is an important milestone in the evolution of the voluntary carbon market and the energy transition. It presents a new way for market participants to access exchange-traded futures contracts for voluntary carbon and to better manage risk,” said Ozzie Pagan, Senior Managing Director at Macquarie Group, which along with Xpansiv market CBL, worked with CME Group in developing the GEO futures.  “The GEO futures offer a new set of tools for carbon offsetting strategies.  Macquarie is pleased to be a contributor in driving innovation and broader market participation in carbon markets.”

Image by marcinjozwiak from Pixabay

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