ICE to launch global carbon futures contract in early 2022

LONDON (REUTERS) – Intercontinental Exchange (ICE) will launch a global carbon futures contract in early 2022, it said on Tuesday (Nov 30), which will enable companies to hedge future carbon costs.

Many countries and regions such as Britain and Europe have implemented emission trading systems (ETS), putting a price on carbon dioxide emissions to help them meet climate targets but these markets are currently fragmented, with different pricing levels.

The new contract will be based on ICE’s exciting Global Carbon Futures Index which uses a basket of global carbon prices from Europe’s ETS, the Regional Greenhouse Gas Initiative, which covers several US states including Connecticut, Delaware, Maryland, Massachusetts and New York, and the price of allowances traded in California’s scheme.

From January the index is expected to be expand to include Britain’s ETS price, which will also contribute to the make-up of the new contract.

“Our Global Carbon Futures Index contract allows market participants to gain exposure to the cost of emissions, across the four largest cap and trade futures markets in the world, in one tradeable instrument,” said Gordon Bennett, managing director of utility markets at ICE.

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