CME to Launch New Emissions Offset Futures

    Stockholm (NordSIP) – As private sector commitments to net carbon neutrality remain popular, financial solutions to address these new needs continue to be developed. To answer this demand, the CME Group, a leading derivatives exchange, announced the CBL Core Global Emissions Offset™ (C-GEO™) futures will be launched on March 7, 2022, pending all relevant regulatory reviews.

    The contract will allow the physical delivery of energy, renewables and other technology-based voluntary carbon offset credits that meet quality and integrity criteria based on the Core Carbon Principles. CBL C-GEO futures will be listed by and subject to the rules of NYMEX.

    “CBL C-GEO futures are the latest in our suite of risk management tools to help bring standardized benchmarks to the rapidly evolving voluntary carbon markets,” said Peter Keavey (Pictured), Global Head of Energy and Environmental Products at CME Group. “As our clients closely follow the implications of Article 6 and other developments in this space, we are responding to demand for scalable market-based solutions that will allow them to execute their reduction strategies more effectively.”

    C-GEO futures were jointly developed with Xpansiv market CBL.  The vintage eligibility of the credits will roll forward on a yearly basis, ensuring that the deliverable credits reflect evolving projects and markets.

    “The CBL Core GEO spot contract has been tremendously well received, with more than 1 million metric tons traded since its January launch,” said Xpansiv Chief Commercial Officer Ben Stuart. “The launch of CBL C-GEO futures will bring expanded risk management and forward pricing capabilities to the market, the benefits of which have been clearly demonstrated by the introduction of futures on our GEO and N-GEO spot instruments.”

    The Core Carbon Principles are an emerging set of standards around the supply of carbon credits to be overseen by the Integrity Council for the Voluntary Carbon Markets (ICVCM), new governance body established to set and enforce global standards for the voluntary carbon market.

    The launch of the CBL C-GEO futures follows the creation of the CBL GEO® and N-GEO™ futures last year.  In 2021, over 57 million tons of CO2 equivalent were traded between the two contracts, with over 6.5 million offsets delivered through seven successful cycles. The pool of offset credits that underpin the CBL GEO, N-GEO and C-GEO contracts is deep, with approximately 230 million offsets available across these three different segments, offering participants choice in effectively meeting reduction targets.


    Image courtesy of CME Group
    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.

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