Global exchange and clearing house operator Intercontinental Exchange (ICE) announced today plans to launch a futures contract based on the ICE Global Carbon Futures Index, adding to the companies suite of ESG-related services and carbon markets-focused products.
Launched in April 2020, the ICE Global Carbon Futures Index serves as a benchmark for the performance of carbon allowance prices, based on a basket of EU, California allowance futures contracts, and the ICE Regional Greenhouse Gas Initiative Futures Contracts. ICE also aims to add UK allowance futures in January, making the index reflective of global carbon markets.
With the new launch, anticipated in early 2022, ICE aims to offer the market a way to access and hedge a global price for carbon.
Gordon Bennett, Managing Director of Utility Markets at ICE, said:
“As businesses continue to adapt to the challenges and opportunities presented by net zero, we are likely to see increasing adoption of tools to value positive and negative externalities. Carbon cap and trade programmes work to control the quantity of emissions and are one of the most effective means to price the negative externality of pollution by incentivizing the reduction of emissions. Our Global Carbon Futures Index contract allows market participants to gain exposure to the cost of emissions across the four largest cap and trade futures markets in the world, in one tradable instrument.”