The Voluntary Carbon Market allows carbon emitters to offset their emissions by purchasing carbon credits generated by projects targeted at removing, or reducing carbon emissions. The EEX Group VCM contract suite will cover four different products, aimed at striking a balance between standardisation, on the one hand, and catering for different customer preferences, on the other. Each of the contracts focuses on specific aspects:
• Verified Emission Reduction (VER), CORSIA-eligible is aligned with the eligibility rules of the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), governed by the International Civil Aviation Organization
• Verified Emission Reduction (VER) – Nature-based focuses on carbon credits from nature-based solutions; separate vintage contracts allow to differentiate carbon credits by year of occurrence of CO2 reduction
• Carbon Removal represents the first-of-its-kind exchange-listed contract designed to focus on removal and sequestration activities
• Global Emission Reduction (GER) is aimed to represent the entire VCM in one product, with a basket approach and gradual pathway to net-zero
Peter Reitz, EEX CEO, explains “While companies first-and-foremost need to reduce their own emissions, carbon offsets are a legitimate tool, especially for hard-to-abate emissions. In this context, robust, trustworthy and secure Voluntary Carbon Markets are instrumental to generate financial investments which are critically needed for a net-zero future.
The VCM launch is the next logical step for us in our sustainability roadmap, as we have a responsibility to our customers, and a duty of care as an exchange market operator to contribute to the transition to a cleaner, greener future.” The launch of the VCM product suite is scheduled for 17 June 2022, with products being listed initially in North America at Nodal Exchange followed by EEX in Europe in the second half of 2022. Through this global listing approach, the VCM products will be made accessible across multiple time zones, reflecting the global nature of the products.
Speaking on the announcement, Paul Cusenza, CEO of Nodal Exchange: “It is critical for the planet that we reduce carbon emissions and it is laudable that so many companies are seeking to contribute to the reduction effort by participating in Voluntary Carbon Markets. EEX Group is very well positioned to become a key player in VCM on a global scale, and Nodal Exchange is ready to play an active role by entering this exciting and dynamic market.”
EEX Group is collaborating with highly experienced industry partners to build a convincing and reliable VCM offering. This includes expanding its cooperation into VCM markets with IncubEx, a long-standing partner of the Group for developing exchange-traded products, services and client relationships in global environmental markets. In addition, Net Zero Markets, a spin-off from award winning carbon risk management firm Redshaw Advisors, has partnered with EEX and Nodal Exchange to list the ‘GER’ product globally. Furthermore AirCarbon Exchange (ACX), a pioneer in the VCM space, headquartered in Singapore, is a strategic partner with related VCM products on its platform and which covers additional geographies in Asia, the Middle East and South America. EEX Group’s VCM proposition follows EEX’s active contributions to multi-stakeholder initiatives such as the Taskforce for Scaling Up the Voluntary Carbon Market (TSVCM) and close coordination with EEX’s global customer base.
EEX Group has over 15 years of experience in operating environmental markets and offers the largest portfolio of environmental contracts worldwide. Relating to carbon emissions, this includes spot and derivatives markets in the European Emissions Trading Scheme (EU ETS), regulated markets in the United States for carbon allowances, offsets in California and the North Eastern Regional Greenhouse Gas Initiative (RGGI), as well as operating the primary auction market for the New Zealand ETS.
EEX Group builds secure, successful and sustainable commodity markets worldwide – together with its customers. The group offers trading in power, natural gas, environmental products, freight and agricultural markets as well as subsequent clearing and registry services, connecting a network of more than 800 trading participants. EEX Group consists of European Energy Exchange (EEX), EPEX SPOT, EEX Asia, Power Exchange Central Europe (PXE) and Nodal Exchange as well as the registry provider Grexel Systems and software companies KB Tech and Lacima. Clearing is provided by EEX Group’s clearing houses European Commodity Clearing (ECC) and Nodal Clear. EEX Group is based in 19 worldwide locations and is part of Deutsche Börse Group. More information: www.eex-group.com
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