Commodity marketplace provider Xpansiv CBL Holding Group (XCHG) announced today that the first trade of its recently introduced Global Emissions Offset (GEO) contract on XCHG’s CBL Markets exchange.
The new GEO is designed to enable the market to effectively set a price on carbon based on real-time transactions of carefully vetted offset projects, based on parameters defined by the International Civil Aviation Organization (ICAO) for CORSIA—the Carbon Offsetting and Reduction Scheme for International Aviation. The GEO is aimed at scaling the global voluntary carbon market, by standardizing and streamlining the purchase of offsets.
Ben Stuart, XCHG Chief Commercial Officer, said:
“GEO pricing is set by trades on CBL Markets, which reflect the real costs of abating emissions. As a result, the GEO enables meaningful price discovery, which will drive greater participation across all sectors in the offset market. Developing a trusted contract like the GEO ensures efficient project financing, price discovery, and risk management. It also allows for the emergence of enhanced hedging instruments and basis trading of other offset types.”
According to XCHG, counterparties supporting the first contract included Macquarie Group and AitherCO2, a financial services provider for the world’s environmental and energy markets. Scobie Mackay, a Managing Director in Macquarie’s Commodities and Global Markets group, said:
“Macquarie is an active participant in the energy transition, and sees the potential of the GEO to provide a leading global carbon product. We believe that a baseline contract for CORSIA-compliant offset volumes will provide market participants with a simplified method of transacting high-quality carbon offsets, better enabling them to provide differentiated value to the spectrum of available offset types. We see the GEO as a key step in the evolution of the voluntary carbon market.”
XCHG stated that the GEO contract was designed with input from financial institutions, trading firms, project developers, NGOs, industry associations, corporations, and carbon-standards organizations, including non-profit Verified Carbon Standard (VCS) developer Verra. David Antonioli, Verra CEO, said:
“The GEO is an important milestone that brings transparency to the voluntary carbon market. It gives stakeholders more confidence, which should encourage more participation and reinforce the fact that the voluntary carbon market provides a clear path to climate action.”