ASX today listed three Environmental Futures contracts.

These new contracts allow participants to price and hedge emissions reduction risk amid the transition to a lower carbon economy.

The contracts represent the first carbon futures contracts to launch in Australia and New Zealand. To support growth in these new markets, ASX has introduced a temporary fee waiver on all Environmental Futures transactions. The fee waiver is intended to help build liquidity by encouraging early engagement from a diverse range of market participants.

The three futures contracts are available for trading today on the ASX 24 Market and include physically delivered Large Generation Certificate (LGC) Futures, Australian Carbon Credit Unit (ACCU) Futures and New Zealand Unit (NZU) Futures. All contracts intend to provide a liquid, transparent, forward pricing curve on an annual basis out to five years.

Contracts are standardised, with each equalling 1,000 underlying LGCs, ACCUs or NZUs.

Daniel Sinclair, ASX Head of Commodities, said:

“As Australia moves from a voluntary to compliance-led carbon market in step with other global jurisdictions, derivatives markets can play an essential role. The transition to clean energy, by definition, is uncertain, and ASX-hosted Environmental Futures will be a key instrument in managing risk and supporting the net zero targets of organisations and policymakers.”