ICE to introduce NBS carbon credit futures contract
Intercontinental Exchange, Inc. (NYSE:ICE) today announced its plans to launch its first Nature-Based Solutions (NBS) carbon credit futures contract.
Subject to regulatory approvals, the new futures contract is expected to launch in the first quarter of 2022. It will be traded and cleared by ICE in London and will physically deliver credits certified under Verra’s Verified Carbon Standard (VCS) and Climate, Community and Biodiversity (CCB) Standards Programs. Each futures contract will be equal to 1,000 eligible VCS credits with each credit equivalent to one metric ton of greenhouse gas emissions.
Alongside this, ICE Benchmark Administration (IBA) is forming the ICE Carbon Oversight Committee to provide independent governance and oversight of ICE’s activities in the voluntary carbon markets. The Committee will advise on the criteria that carbon credits must meet to be deliverable in ICE hosted futures contracts. The Committee’s work will be informed by the market principles that are being elaborated by the Taskforce on Scaling Voluntary Carbon Markets and the Voluntary Carbon Markets Integrity Initiative.
“Robust governance and oversight of ICE’s platforms in the voluntary carbon markets will help give buyers confidence that credits purchased through the futures contract have environmental integrity”, said Tim Bowler, President of ICE Benchmark Administration. “By providing enhanced governance and oversight, the ICE Carbon Oversight Committee will help the environmental markets grow and increase confidence in the quality of the credits being bought through ICE’s marketplaces”.
ICE offers customers access to the largest and most liquid environmental markets in the world to price climate risk. More than 14 gigatons of carbon trades on ICE annually, equivalent to approximately 40% of the world’s total annual emissions footprint based on current estimates.