Exchange in Focus: CME Group’s Voluntary Carbon Emissions Offset Contracts Surpass 100 Million Offsets Traded
29 April 2022
CME Group has announced that combined volume across CME Group’s voluntary carbon emissions offset contracts has surpassed 100,000 contracts traded, equivalent to 100 million carbon offset credits, or 100 million metric tons of CO2 equivalent.
“CME Group continues to play a critical role in the development of the carbon sector through our suite of voluntary carbon emissions offset products,” said Peter Keavey, Global Head of Energy and Environmental Products at CME Group. “This milestone of 100 million offsets traded is an exciting step in the path towards net zero, creating more transparency and liquidity that will be key to advancing strategies and meeting global environmental targets.”
CME Group reports that market users have quickly adopted these risk management tools since the initial launch of Global Emissions Offset (GEO) futures and Nature-Based Global Emissions Offset (N-GEO) futures last year. Key highlights of how these markets have grown include:
- Combined open interest reached a record 20,763 contracts on March 29, 2022, representing over 20 million deliverable carbon offset credits, with open interest extending out to December 2024.
- Record average daily volume in March 2022 of a combined 1,000 contracts.
- Since launch, CME Group has had multiple clearing firms help facilitate ten successful deliveries, totaling over 8.8 million offsets, or 8.8 million metric tons of CO2 equivalent.
- Over 75 firms or brokers have executed trades in these products.
- Nearly half of total volume has come from Europe and the Middle East, followed by North America and Asia.
UN SSE Derivatives Exchanges Network
The CME Group has earlier this year solidified its commitment to transparency and sustainability by becoming a Founding Member of the UN SSE Derivatives Network. The group is one of the 12 founding members from across the world that committed to the opportunity to contribute positively to the achievement of the Sustainable Development Goals (SDGs). Derivatives exchanges are an important part of the overall solution, whether as providers of relevant products and services, contributors to greater data availability and transparency or as conveners of the market to address barriers to change. CME was Chair of the SSE Derivatives Advisory Group and wrote the forward for the report How derivative exchanges can promote sustainable development, a joint SSE-WFE report that provides an overview of the role of derivatives markets generally, present some of the things derivatives exchanges are already doing in relation to sustainability, and highlight ways in which these exchanges can support the transition to more sustainable development pathways. The SSE works with derivatives exchanges to advance sustainable development in their markets. For more information, please contact the SSE team directly at info@sseinitiative.org.About the SSE
The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.
