ICE to launch CORSIA carbon credit futures market to manage emissions

Intercontinental Exchange, a leading global provider of data, technology, and market infrastructure, plans to launch a physically delivered futures contract for carbon credits which the International Civil Aviation Organisation (ICAO) considers eligible for use by the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

CORSIA is the first global market-based carbon credit scheme, targeted at reducing emissions from international aviation. CORSIA is part of a basket of policy measures taken by the ICAO and allows airline operators to offset an amount of carbon dioxide emissions by retiring carbon credits.

The ICE futures contract will be for use during the first phase of CORSIA covering the 2024 to 2026 compliance period. ICE plans to list a December 2024, December 2025, December 2026, and December 2027 contract, allowing airline operators and other market participants to manage their exposure during each year of the first phase of CORSIA and up to one month before the final compliance deadline at the end of January 2028.

“With the pilot phase complete and the start of the first phase of CORSIA in sight, market participants requested an ICE futures contract which airline operators can use to meet their offsetting obligations under CORSIA,” said Gordon Bennett, Managing Director of Utility Markets at ICE. “Underpinned by a policy framework provided by ICAO, and with a natural pool of buyers in the form of airline operators, we believe this contract will appeal to a wide range of market participants.”

The physically delivered contract will deliver CORSIA-compliant carbon credits from programmes approved by the ICAO Council. Initially, ICE’s futures contract will only support CORSIA eligible carbon credits issued by the American Carbon Registry (ACR), which is currently one of two ICAO-approved carbon credit programmes. In due course, and subject to approval by the ICAO Council, ICE aims to include carbon credits issued by Verra and Gold Standard.

The CORSIA contract follows the launch in 2022 of ICE’s range of nature-based carbon credit futures contracts. It will become part of ICE’s global environmental portfolio which includes the five most actively traded cap and trade markets in the world, including the EU ETS, the Western Climate Initiative, the UK ETS, the Regional Greenhouse Gas Initiative (RGGI) and the Washington State Cap and Invest Programme.

ICE is a leader in global energy and environmental markets including home to the global benchmark European Emission Allowance derivatives market. Since launch, over 100 billion carbon allowances, 350 million renewable energy certificates, approximately 6 billion carbon credits, and the equivalent of 7.5 billion Renewable Identification Numbers have traded on ICE.

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