ICE will offer its first Nature-Based Solutions (NBS) carbon credit futures contract by March.
ICE statement: Subject to regulatory approvals, the new futures contract is expected to launch in the first quarter of 2022. It will be traded and cleared by ICE in London and will physically deliver credits certified under Verra’s Verified Carbon Standard (VCS) and Climate, Community and Biodiversity (CCB) Standards Programs. Each futures contract will be equal to 1,000 eligible VCS credits with each credit equivalent to one metric ton of greenhouse gas emissions.
“Environmental markets can help fund the cultivation and preservation of natural capital, and the new nature-based solutions futures contract will allow the market to value natural assets in the agriculture, forestry and other land use sectors,” said Gordon Bennett, Managing Director of Utility Markets at ICE. “At ICE, our futures market and auction platform are integral in facilitating the flow of capital to projects that can help the world meet its commitments to the Paris Agreement, as well as help preserve natural assets.”
Alongside this, ICE Benchmark Administration (IBA), is forming the ICE Carbon Oversight Committee to provide independent governance and oversight of ICE’s activities in the voluntary carbon markets. The Committee will advise on the criteria that carbon credits must meet to be deliverable in ICE hosted futures contracts. The Committee’s work will be informed by the market principles that are being elaborated by the Taskforce on Scaling Voluntary Carbon Markets and the Voluntary Carbon Markets Integrity Initiative.
“Robust governance and oversight of ICE’s platforms in the voluntary carbon markets will help give buyers confidence that credits purchased through the futures contract have environmental integrity”, said Tim Bowler, President of ICE Benchmark Administration. “By providing enhanced governance and oversight, the ICE Carbon Oversight Committee will help the environmental markets grow and increase confidence in the quality of the credits being bought through ICE’s marketplaces”.
CONTEXT: ICE has the largest environmental markets in the world to help them manage climate risks. More than 14 gigatons of carbon trades on ICE annually, equivalent to approximately 40% of the world’s total annual CO2 volumes.