CME Group to Launch Nature-Based Global Emissions Offset Futures
CME Group, the world's leading and most diverse derivatives marketplace, announced that it will launch a Nature-Based Global Emissions Offset (N-GEO)™ futures contract on August 1, 2021. N-GEO futures will be the company's latest market-based solution to help create a more transparent and efficient voluntary emissions offset market.
N-GEO futures were jointly developed with Xpansiv market CBL, a leader in spot energy and environmental markets. Xpansiv launched the Nature-Based Global Emissions Offset (N-GEO) spot contract earlier this year, which is based on eligible voluntary offsets from Agriculture, Forestry, and Other Land Use (AFOLU) projects with additional Climate, Community, and Biodiversity (CCB) accreditation.
"More companies are relying on nature-based offsets as part of their overall climate strategies as the move to net-zero emissions continues to accelerate," said Peter Keavey, Global Head of Energy at CME Group. "By offering a standardized mechanism for managing the price risk associated with those initiatives, our new N-GEO futures will provide the marketplace with an important tool to help navigate the ongoing energy transition."
"Following the rapid market adoption of the GEO, we launched the N-GEO in response to rising demand for nature-based solutions," said Xpansiv President and COO John Melby. "It brings transparency and price certainty to a vital subset of the offset market, and N-GEO futures will further empower participants to meet climate commitments while promoting biodiversity and supporting developing communities."
The Nature-Based GEO futures will allow for delivery of eligible voluntary offset credits and will be listed by and subject to the rules of NYMEX.
Earlier this month, Fazzaco reported that CME Group launched FTSE 100 Adjusted Interest Rate (AIR) Total Return futures. FTSE 100 AIR Total Return futures have similar characteristics to total return swaps and are designed to provide market participants with exposure to the implied equity repo rate of a European equity benchmark with an overnight floating rate, using SONIA as the financing reference rate.
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