ICE Carbon Index Futures
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One of the roles of Environmental markets is to provide important price signals to help re-balance the carbon cycle and meet the world’s atmospheric carbon budget to deliver a 1.5°C pathway for 2050. Listen to the All About the Green podcast where ICE talks about the importance of environmental markets for valuing externalities to facilitate the energy transition and to create an asset class for natural capital.
Voluntary Carbon Spotlight
The Nature-Based Solutions Carbon Credit Futures, which trades under the contract code NBT, was launched on May 9, trading 102 lots. It physically delivers verified carbon unit (VCU) credits certified under Verra’s Verified Carbon Standard (VCS) Agriculture, Forestry and Other Land Use (AFOLU) Projects with Climate, Community and Biodiversity (CCB) Certification, with vintages between Jan. 1, 2016, to Dec. 31, 2020.
Each Nature-Based Solutions Carbon Credit 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 listed NBT futures expiries in Dec. 2022, Dec. 2023, and Dec. 2024.
Carbon
Global Carbon Index Futures
- The Global Carbon Index Futures Dec22 expiry reached a high of 806 points on April 22, before settling the month at 766 points.
North America
- 209,762 lots traded across the North American Physical Environmental portfolio. CCAs accounted for the majority share of volume, at 58%. Open interest (OI) across the portfolio reached 1,133,517 on April 27, the highest level for 2022 before finishing the month at 1,109,877 following delivery.
- 118,867 lots of CCA futures and options traded this month, with CCA options accounting for 29% of total volume. CCA Dec22 pricing reached a high of $32.21 during the month, before settling out April at $30.53.
- 27,257 lots of RGGI futures traded this month. RGGI Dec22 pricing reached $14.35 on April 20, the second highest level for the year behind $14.44 reached on Jan. 5.
Europe
- EUA Futures traded 507,106 lots and EUA Options 106,934 lots. Combined OI reached 961,387 lots.
- UKA Futures saw 28,912 lots traded. OI was 31,112 lots, an 8% increase over April. The auctions on April 6 and April 20 fully cleared.
Renewables
- 61,298 lots of REC and SREC futures traded this month, representing a 27% increase over April 2021. 75% of this monthly total came from PJM Tri RECs. Total OI for RECs and SRECs reached a new all time high for a second straight month, at 633,775 lots.
Key Dates & Events
North America
- Contract Expiry and Deliveries - Option Expiry May 16, Last Trade Day May 25 and Delivery Day May 31
- CCA Auction #31 will occur on May 18, with 58.3 mil current allowances and 7.9 mil advanced allowances to be available for sale
- RGGI Auction #56 will occur on June 1, with 22.3 mil allowances to be available for sale
Europe
- UKA auctions will be held May 4 and May 18
- Contract Expiry and Deliveries - Futures Expiry May 23, and Delivery Day May 26
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