Wednesday June 8 2022

News Source: Global Exchanges

Focus: Derivative Market Segment

Type: General

Country: US

Link: https://bit.ly/3NEjOG0




On 7th June 2022, Nodal Exchange and IncubEx announced that they have  planned a launch of new environmental products including several first-of-their-kind futures contracts in renewable energy credits, renewable natural gas certificates (renewable thermal certificates) and voluntary carbon offsets. The new Nodal Exchange products further expand the world’s largest exchange listed suite of environmental products. 

This new set of physically delivered environmental products developed in collaboration with IncubEx will be listed on Nodal Exchange on June 17th, 2022, pending regulatory review, and includes: 

  • Western Regional Energy Generation Information System (WREGIS) Registered Renewable Energy Certificates from Center for Resource Solutions (CRS) Listed Wind Energy Facilities front-half and back-half Futures 
  • NEPOOL Quad Qualified Renewable Energy Certificate Class 1 Futures 
  • Renewable Natural Gas Certificate Futures 
  • Verified Emission Reductions (VERs) – Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Eligible and Nature-Based Futures & Options 
  • Certified Emission Reductions (CERs): Commitment Period 2; 2013+; and 2016+ Futures 
  • Carbon Removal Futures 
  • Global Emission Reduction (GER)® Futures, developed by Net Zero Markets 

Renewable Energy Certificates: 

The WREGIS REC contracts represent renewable wind energy produced from Western Electricity Coordinating Council (WECC) registered facilities listed with the CRS in connection with the administration of its Green-e® certification programs. WREGIS is an independent REC tracking system that covers the Western Interconnection territory. 

Voluntary RECs, like the new contracts, which are also referred to as hybrid voluntary/compliance RECs, are often used by companies looking to secure renewable energy such as wind or solar power for their operations and meet corporate sustainability objectives. 

Renewable Natural Gas Certificates 

The Renewable Natural Gas Certificate Futures are the first-ever exchange listed futures contracts in the renewable natural gas complex. These contracts deliver Renewable Thermal Certificates (RTCs) issued by the M-RETS® for qualifying renewable natural gas (RNG) or biomethane injection into a distribution or interstate natural gas pipeline in the United States. RTCs, similar in nature to RECs, are from RNG produced from landfills, animal manure and wastewater facilities and must complete a carbon intensity (CI) evaluation and achieve a score of 40 CI or less to be deliverable into the contract. 

Voluntary Carbon Offset Futures & Options 

The new Voluntary Carbon Offset contracts cover a range of offset standards and project types. The product group includes: Voluntary Emission Reduction (VER) CORSIA-eligible Futures and Options; Verified Emission Reduction Nature-based (Base and Vintage) Futures and Options; Global Emission Reduction (GER) Futures contracts – which is launched in cooperation with NetZero Markets – and Carbon Removal Futures. 

Certified Emission Reduction Futures 

The CER contracts are not currently listed on any other exchange and are novel in their updated vintage definitions, modified from prior CER listed contracts to help align with CORSIA eligible emission units and the Paris Agreement’s Article 6, which establishes a United Nations mechanism to trade credits from emissions reductions from specific projects. 

CERs are the largest supply of global offsets, vetted to international standards, and serve a number of use cases, including Kyoto, Paris, CORSIA and voluntary offsetting obligations. 

  • Commitment Period 2 Futures specify CERs of a date range consistent with the use under the second commitment period of the Kyoto Protocol. 
  • 2013+ futures deliver CERs of the date range consistent with the requirements under the Paris Agreement. 
  • 2016+ futures deliver CERs consistent with the date range eligibility requirements under CORSIA while also providing more certainty regarding corresponding emissions adjustments. 

Click on the above link for further information Â