CHICAGO, Jan. 26, 2021 /PRNewswire/ -- CME Group, the
world's leading and most diverse derivatives marketplace, today
announced it will launch a Global Emissions Offset™ (GEO™) futures
contract on March 1, 2021, pending
all relevant regulatory reviews. The new contract, which will
provide customers with a market-based solution to manage global
emissions risk, was jointly developed with Xpansiv market CBL, a
leader in spot energy and environmental markets.
"Demand for voluntary carbon offsets is growing around the world
as more countries and companies take action toward creating a lower
carbon economy," said Peter Keavey,
Global Head of Energy at CME Group. "GEO futures will provide a
regulated, market-based solution that can help address risk
management needs for near-term emissions reduction strategies, as
well as a standardized pricing benchmark to help facilitate
long-term climate goals."
"After a decade building the largest voluntary carbon market in
the world, it's remarkable to witness this watershed moment," said
Xpansiv Chief Strategy Officer Nathan
Rockliff. "We've worked closely with myriad
stakeholders—corporates, project developers, trading firms,
airlines, and leading standards like VERRA, CAR, ACR—to develop the
GEO, the first standardized contract for carbon offsets across
multiple project types and geographies. The GEO helps to establish
a global price for the voluntary carbon market based on offsets
vetted by a multi-year process, and with this landmark futures
contract, CME Group and Xpansiv provide a clear path to action for
net-zero commitments."
The Taskforce on Scaling Voluntary Carbon Markets, a private
sector-led voluntary carbon market initiative, has published
recommendations around the need for a physically-delivered futures
market, stating that it could help achieve a more robust and
transparent voluntary offset market. CME Group is a member of the
Taskforce alongside many of its clients and market
participants.
Voluntary offsets allow businesses to purchase credits to help
reduce their overall carbon footprint as they work to transition to
more sustainable business practices. The scale of trading in the
voluntary carbon offset market is currently around $320 million and this is expected to grow as
demand for global decarbonization increases and climate hedging
strategies become more standardized.
The GEO futures contract is based on the Carbon Offsetting and
Reduction Scheme for International Aviation (CORSIA), which
includes globally accepted carbon offset standards based on a set
of rigorous criteria developed by the International Civil Aviation
Organization (ICAO), a specialized agency of the United Nations.
GEO futures will allow for delivery of CORSIA eligible voluntary
offset credits from three ICAO approved registries and will be
listed by and subject to the rules of NYMEX. For more
information and contract specifications, please visit
www.cmegroup.com/geo.
About CME Group
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) enables clients to trade futures,
options, cash and OTC markets, optimize portfolios, and analyze
data – empowering market participants worldwide to efficiently
manage risk and capture opportunities. CME Group exchanges offer
the widest range of global benchmark products across all major
asset classes based on interest rates, equity
indexes, foreign exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform,
fixed income trading via BrokerTec and foreign exchange trading on
the EBS platform. In addition, it operates one of the world's
leading central counterparty clearing providers, CME
Clearing. With a range of pre- and post-trade products and
services underpinning the entire lifecycle of a trade, CME Group
also offers optimization and reconciliation services through
TriOptima, and trade processing services through Traiana.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and, E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago Board of Trade are trademarks
of Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile
Exchange and ClearPort are trademarks of New York Mercantile
Exchange, Inc. COMEX is a trademark of Commodity Exchange,
Inc. BrokerTec, EBS, TriOptima, and Traiana are trademarks of
BrokerTec Europe LTD, EBS Group LTD, TriOptima AB, and Traiana,
Inc., respectively. Dow Jones, Dow Jones Industrial
Average, S&P 500 and S&P are service and/or trademarks of
Dow Jones Trademark Holdings LLC, Standard & Poor's Financial
Services LLC and S&P/Dow Jones Indices LLC, as the case may be,
and have been licensed for use by Chicago Mercantile Exchange
Inc. All other trademarks are the property of their
respective owners
About Xpansiv
Xpansiv is the global market for ESG-inclusive commodities. These
Intelligent Commodities™ bring transparency and liquidity to
markets, empowering participants to value energy, carbon, and water
to meet the challenges of an information-rich, resource-constrained
world. The company's main business units include CBL, the
leading spot exchange for ESG commodities, including carbon,
renewable energy certificates, and Digital Natural Gas™; H2OX,
the leading spot exchange for water in Australia; and XSignals, which provides
end-of-day and historical market data. Xpansiv is the digital nexus
where ESG and price signals merge. Xpansiv.com
CME-G
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SOURCE CME Group