N-GEO Futures Trading Off to Buoyant Start 

    Stockholm (NordSIP) – Following their announcement at the end of June, CME Group has now confirmed that its Nature-Based Global Emissions Offset (N-GEO) futures have launched and are available for trading. Ten firms, including Andurand Capital Management, Hartree Partners, Macquarie Group and Vitol, traded 1,315 total contracts, equivalent to over 1.3 million environmental offsets between August 1st and August 3rd, with participation from 10 firms.

    “N-GEO futures are the latest product we have launched to provide our global clients with a standardized tool for managing the price risks associated with reducing emissions,” said Peter Keavey, Global Head of Energy at CME Group. “We are pleased to see early adoption of these new contracts, which will join our GEO futures in helping bring more transparency and efficiency to the voluntary carbon offset market and make it easier for companies and countries to meet their carbon reduction targets.”

    N-GEO and GEO futures are available for delivery of eligible offset credits and are listed by and subject to the rules of NYMEX. The contracts cover activities such as afforestation, reforestation, revegetation, wetland rewetting and conservation and improved forestry management all fall under the Agriculture, Forestry and Other Land Use (AFOLU) project category with additional Climate, Community, and Biodiversity (CCB) accreditation. GEO futures are based on the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) framework.

    “We see the N-GEO contract as a milestone in the continued growth of carbon assets and are excited for the opportunity to play a part in supporting the ecosystem of financial solutions that support the development of nature-based emission reduction projects,” said Casey Dwyer, Co-Portfolio Manager of the Andurand Climate and Energy Transition Fund.

    “We are pleased to participate in CME Group’s new N-GEO markets, which have joined the GEO contract in providing a transparent marketplace for environmental risk management strategies,” said Ariel Perez, Head of Environmental Products at Hartree Partners. “The path to net-zero carbon will require a variety of innovative solutions, including market-based mechanisms like N-GEO and GEO which help global clients discover price and manage emissions risk more effectively,” Perez adds.

    “This is another important milestone in the evolution of the voluntary carbon markets,” said Erik Petersson, Head of Global Carbon in Macquarie Group’s Commodities and Global Markets division. “At Macquarie, we are focused on high-quality carbon offset supply and the provision of market-leading offset solutions to our clients. This new futures product enhances our and our clients’ ability to manage price risk around the nature-based solutions portion of the market. We expect this to drive broader participation in the voluntary carbon markets as transparency and liquidity increase.”

    Image by Oliver Kepka from Pixabay

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

    Latest Posts

    NordSIP Insights Handbook

    What else is new?