ICE Launches 10 Carbon Credit Futures Vintages Extending Out to 2030
17 August 2022 - 10:30PM
Business Wire
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global
provider of data, technology, and market infrastructure, announced
that it has launched 10 new Nature-Based Solutions Carbon Credit
futures contracts, providing a carbon credit futures contract
portfolio which allows market participants to buy, sell and hedge
carbon credits from 2016 out to 2030.
“The structure for the new carbon credit vintages was developed
through extensive discussions with a wide community covering
corporate buyers, developers, trading houses, and financials,” said
Gordon Bennett, Managing Director of Utility Markets at ICE. “We
believe that the new carbon credit futures satisfy the key demands
of the market. They allow single-vintages to be traded with the
added liquidity benefits from having each futures contract deliver
a fixed five-year vintage bucket, they provide a forward curve out
to 2030, and customers can extend carry trades for multiple years
while trading vintage spreads without the basis risk from the cost
of carry.”
On August 15, the day the new contracts launched, 45 lots in the
vintage ranges 2017-2021 (OVA) and 2018-2022 (OVB) traded. Chevron
Products Company, a division of Chevron U.S.A. Inc., Hartree
Partners, Mercuria, Trafigura and Vitol, were involved in trading
the new contracts. Evolution Markets Limited brokered some of the
trades.
“Mercuria is excited to work with ICE on trading these new
contracts”, said Adam Raphaely, Managing Director of Trading at
Mercuria Energy America. “Their introduction further demonstrates
ICE’s innovative approach toward coalescing liquidity around
emerging environmental markets and products. Mercuria is committed
to supporting markets that facilitate emission reductions in the
energy transition."
“The development of a deep and liquid financial market for
carbon credits will help us reach net-zero,” said Michael Curran,
Head of Environmental Products at Vitol. “Carbon credits have a key
role to play, both in mitigating climate change and addressing
other sustainability issues. We are pleased to be part of this
latest exciting phase in the market’s evolution.”
“We are pleased to have worked with ICE to create this new
contract and execute its first trades,” said Ariel Perez, Head of
Environmental Products at Hartree Partners. “We are excited for the
additional transparency and new levels of choice it brings to the
market for buyers of carbon credits.”
With the addition of the 10 new contracts to the existing 2016
to 2020 nature-based solutions future, ICE now offers 11 carbon
credit futures, each covering a fixed period of five years, from
January to December from 2016 to 2030. Each futures contract has
its own set of expiries which are outlined in each contract
specification:
- Nature-Based Solution Carbon Credit Vintage 2016-2020 Futures
(NBT)
- Nature-Based Solution Carbon Credit Vintage 2017-2021 Futures
(OVA)
- Nature-Based Solution Carbon Credit Vintage 2018-2022 Futures
(OVB)
- Nature-Based Solution Carbon Credit Vintage 2019-2023 Futures
(OVC)
- Nature-Based Solution Carbon Credit Vintage 2020-2024 Futures
(OVD)
- Nature-Based Solution Carbon Credit Vintage 2021-2025 Futures
(OVE)
- Nature-Based Solution Carbon Credit Vintage 2022-2026 Futures
(OVF)
- Nature-Based Solution Carbon Credit Vintage 2023-2027 Futures
(OVG)
- Nature-Based Solution Carbon Credit Vintage 2024-2028 Futures
(OVH)
- Nature-Based Solution Carbon Credit Vintage 2025-2029 Futures
(OVI)
- Nature-Based Solution Carbon Credit Vintage 2026-2030 Futures
(OVJ)
ICE’s Nature-Based Solutions Carbon Credit futures contract
physically delivers Verified Carbon Unit (VCU) credits. Each
futures contract is equal to 1,000 carbon credits, where each
credit is equal to the removal or reduction of one metric ton of
greenhouse gas emissions achieved by projects that preserve and
maintain natural ecosystems.
ICE has operated environmental markets for almost two decades.
During this time, over 100 billion tons of carbon allowances, over
250 million renewable energy certificates, three billion carbon
credits, and the equivalent of over 1.7 billion Renewable
Identification Numbers have traded on ICE, reflecting ICE’s role as
the world’s leading environmental marketplace.
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune
500 company that designs, builds and operates digital networks to
connect people to opportunity. We provide financial technology and
data services across major asset classes that offer our customers
access to mission-critical workflow tools that increase
transparency and operational efficiencies. We operate
exchanges, including the New York Stock Exchange, and
clearing houses that help people invest, raise capital and
manage risk across multiple asset classes. Our comprehensive fixed
income data services and execution capabilities provide
information, analytics and platforms that help our customers
capitalize on opportunities and operate more efficiently. At ICE
Mortgage Technology, we are transforming and digitizing the
U.S. residential mortgage process, from consumer engagement through
loan registration. Together, we transform, streamline and automate
industries to connect our customers to opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.
Information regarding additional trademarks and intellectual
property rights of Intercontinental Exchange, Inc. and/or its
affiliates is located here. Key Information Documents for
certain products covered by the EU Packaged Retail and
Insurance-based Investment Products Regulation can be accessed on
the relevant exchange website under the heading “Key Information
Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 -- Statements in this press release regarding
ICE's business that are not historical facts are "forward-looking
statements" that involve risks and uncertainties. For a discussion
of additional risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statements, see ICE's Securities and Exchange Commission (SEC)
filings, including, but not limited to, the risk factors in ICE's
Annual Report on Form 10-K for the year ended December 31, 2021, as
filed with the SEC on February 3, 2022.
ICE- CORP
Source: Intercontinental Exchange
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version on businesswire.com: https://www.businesswire.com/news/home/20220817005360/en/
ICE Media Contact: Rebecca Mitchell
Rebecca.Mitchell@ice.com +44 7951 057 351
ICE Investor Contact: Mary Caroline O’Neal
marycaroline.oneal@ice.com (770) 738-2151
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