CME Group to Launch Nature-Based Global Emissions Offsets Futures Contract

CME Group, one of the United States’ top derivatives exchanges, is set to launch nature-based global emissions offset futures contract on August 1, 2021. According to Reuters, the exchange aims to provide transparency to the global carbon offset market. Such assets can be generated through schemes like planting trees or agriculture projects.

Overall, carbon offsets mainly trade in a voluntary market on a project-by-project basis. “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, commented on the announcement. The launch also comes in the light of companies like Shell, who had agreed to reach net-zero emissions, looking to use nature-based carbon offsets for emission reduction purposes.

“These projects might protect ecosystems or fund the construction of solar farms, which replace fossil fuel energy. In other words, carbon offsetting is a trading system based on investments in a variety of projects that prevent emissions from entering the atmosphere. Because carbon dioxide emissions mix quickly in the atmosphere and are therefore spread evenly across the globe,  it is possible to invest in projects around the world to compensate your carbon dioxide emissions,” Zurich-based Climeworks commented about carbon offsets.

Recent Launches

Recently, CME Group launched micro Bitcoin futures in the United States, which is a smaller-size version of its existing Bitcoin derivatives contract. The US derivatives exchange giant first revealed the specifications of these micro Bitcoin futures contracts in March.

In fact, the trading volume of recently launched micro Bitcoin futures surpassed 100,000 contracts within only the first six days of its launch. CME released its first BTC derivatives in December 2017, which coincided with the crypto price touching the critical $20,000 threshold for the first time in history. With demand for crypto derivatives in the United States, the exchange expanded its offerings with the launch of the BTC options and ETH futures.

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