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ICE to Launch its First Nature-Based Solutions Carbon Credit Futures Contract
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Intercontinental Exchange (NYSE:ICE) has announced plans to launch its first Nature-Based Solutions (NBS) carbon credit futures contract, expected in Q1 2022, pending regulatory approvals. Each contract will be equivalent to 1,000 VCS-certified carbon credits, aimed at promoting funding for natural capital in agriculture, forestry, and land use. The ICE Carbon Oversight Committee will oversee the governance of these carbon markets to ensure the integrity of the credits. This initiative will further solidify ICE's position in the environmental market, where it currently facilitates a significant portion of global carbon trading.
The futures contract supports funding for environmental projects contributing to the Paris Agreement.
Formation of the ICE Carbon Oversight Committee enhances governance, boosting confidence in credit integrity.
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LONDON--(BUSINESS WIRE)--
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that it plans to launch its first Nature-Based Solutions (NBS) carbon credit futures contract.
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”.
ICE offers customers access to the largest and most liquid environmental markets in the world to price climate risk. More than 14 gigatons of carbon trades on ICE annually, equivalent to approximately 40% of the world’s total annual emissions footprint based on current estimates.
About ICE Benchmark Administration
ICE Benchmark Administrationis authorized and regulated by the Financial Conduct Authority for the regulated activity of administering a benchmark, and is authorized as a benchmark administrator under the UK Benchmarks Regulation.
About Intercontinental Exchange
Intercontinental Exchange, Inc.(NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 4, 2021.
What is the ICE Nature-Based Solutions carbon credit futures contract?
The ICE Nature-Based Solutions carbon credit futures contract is a new financial instrument aimed at trading carbon credits, each representing one metric ton of greenhouse gas emissions, to promote environmental sustainability.
When is ICE planning to launch the NBS carbon credit futures contract?
ICE plans to launch the NBS carbon credit futures contract in the first quarter of 2022, subject to regulatory approvals.
What standards will the carbon credits in ICE's new futures contract adhere to?
The carbon credits in ICE's new futures contract will be certified under Verra's Verified Carbon Standard and Climate, Community and Biodiversity Standards.
How does the ICE Carbon Oversight Committee contribute to the carbon markets?
The ICE Carbon Oversight Committee provides independent governance and oversight for ICE's activities in the voluntary carbon markets, ensuring the credits meet environmental integrity standards.
What percentage of global carbon trading is facilitated by ICE?
ICE facilitates more than 14 gigatons of carbon trades annually, equivalent to approximately 40% of the world's total annual emissions footprint.
