CME Group adds two new futures contracts to its suite of voluntary carbon products
International derivatives marketplace CME Group will add two new futures contracts to its suite of voluntary carbon products, which have quickly found market adoption since launching last year.
The CBL N-GEO Trailing and CBL C-GEO Trailing futures contracts will be available for trading on August 8, 2022, pending regulatory review, allowing clients to trade offset credits that are no longer within the eligibility window of the existing CBL N-GEO and CBL C-GEO contracts. Xpansiv exchange CBL plans to launch the N-GEO Trailing spot contract on July 18, 2022. The C-GEO Trailing spot contract began trading in January.
“CME Group has been a leader in introducing effective price discovery and risk management solutions that help global businesses manage the risks associated with carbon reduction,” said Peter Keavey, Global Head of Energy and Environmental Products at CME Group. “As liquidity in our carbon markets continues to grow, customers can hedge their risk across a range of different vintages and offset types all on one exchange, with the benefits that come with transacting on CME Group’s platform.”
CME Group’s suite of voluntary carbon emissions offsets products are already meeting a significant market need today, with participation growing each month:
- 135+ million carbon emissions offsets have been traded since launch, equivalent to over 135 million metric tons of CO2e.
- Record open interest on June 9, 2022 of 22,669 contracts, with open interest extending out through 2025.
- Record volume on June 14, 2022 of 5,117 contracts traded, with combined average daily volume in June currently over 1,400 contracts.
- June has seen a record number of new participants, with over 90 participants having traded one of the existing carbon emissions offset products since launch.
Under the existing CBL N-GEO and CBL C-GEO futures contracts, offset eligibility rolls on an annual basis and the oldest vintage years are no longer eligible for delivery. The Trailing contracts are designed to help market participants manage the price risks associated with these older vintage years.
CBL N-GEO Trailing and CBL C-GEO Trailing futures will be listed by and subject to the rules of NYMEX.