Exchange to list US voluntary carbon credits

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London, 19 February: The Chicago Climate Futures Exchange (CCFE) will tomorrow list futures contracts for carbon offsets registered under the US Climate Action Reserve.

The Climate Action Reserve is the offsets programme of the California Climate Action Registry (CCAR) and issues a credit known as a Climate Reserve Ton (CRT) for the avoided emission of a metric tonne of carbon dioxide equivalent.

Each CCFE contract will represent 1,000 CRTs. Contracts will be annual, for the current year and the next 10 consecutive years, expiring at the end of each December.

Participants must have accounts in the CCAR registry, and will have the option of physical settlement, through the delivery of CRTs with a vintage of 2008 or later.

Projects under the CCAR programme are undertaken voluntarily, with the buyers of the credits typically corporations that want to offset the carbon footprint of their businesses. However, participants are also becoming involved because the programme may be recognised as an ‘early action’ in future Californian or federal US greenhouse gas cap-and-trade systems.

Around 500,000 CRTs have been issued so far, but this is set to grow to 1.5 million by June and 4.5 million by June 2010, according to CCAR president Gary Gero.

The CCFE already lists futures and options contracts for three other types of carbon credit: Regional Greenhouse Gas Initiative (RGGI) allowances; Carbon Financial Instruments, the credits traded by CCFE’s sister exchange, the Chicago Climate Exchange (CCX); and certified emission reductions, issued by the UN’s Clean Development Mechanism (futures only).

“We listed RGGI and that has been successful. We are very excited about the California scheme – all these things add to the momentum in carbon markets,” said Neil Eckert, chief executive of Climate Exchange, the London-listed firm that owns CCFE, CCX and the European Climate Exchange.