CME Group, which runs the nation’s largest derivatives exchange, will launch a Nature-Based Global Emissions Offset futures contract on Aug. 1.
The futures contract, called N-GEO, was jointly developed with Xpansiv market CBL, a leader in spot energy and environmental markets. Xpansiv launched the N-GEO spot contract earlier this year based on eligible voluntary offsets from agriculture, forestry, and other land-use projects with additional climate, community, and biodiversity accreditation.
“More companies are relying on nature-based offsets as part of their overall climate strategies as the move to net-zero emissions continues to accelerate,” Peter Keavey, global head of energy at CME Group, said. “By offering a standardized mechanism for managing the price risk associated with those initiatives, our new N-GEO futures will provide the marketplace with an important tool to help navigate the ongoing energy transition.”
The planned August launch of the N-GEO futures contract is subject to various regulatory approvals.
“Following the rapid market adoption of the GEO, we launched the N-GEO in response to rising demand for nature-based solutions,” Xpansiv President and COO John Melby said. “It brings transparency and price certainty to a vital subset of the offset market, and N-GEO futures will further empower participants to meet climate commitments while promoting biodiversity and supporting developing communities.”
The purchase of nature-based voluntary offsets allows businesses to finance natural climate solutions while transitioning to more sustainable business practices. CME’s Nature-Based GEO futures will allow for delivery of eligible voluntary offset credits and will be listed by and subject to the rules of NYMEX.