CME Group’s Green Exchange LLC said on Monday it would launch a post-2012 contract for U.N.-backed carbon credits on February 27.
The contract should help carbon traders price a policy shift which has narrowed the eligibility of certified emissions reductions (CERs) for use in the European Union’s emissions trading scheme, the world’s biggest such market.
The European Commission confirmed on Friday that from April 30 2013 it would ban CERs produced by big industrial projects in China and India which destroy potent greenhouse gases called hydrofluorocarbon-23 (HFC-23) and nitrous oxide.
Given a resulting shortened supply the move is expected to raise CER prices.
The Green Exchange said its contract would be called the CERplus SM Futures contract and be available for trading from February 27.
“The CERplus Futures contract introduces a new underlying unit of trade, called Relevant CERs, defined as CER units that will be deemed eligible for compliance purposes,” the exchange said in a statement.
Carbon traders are struggling to interpret the price implications of the EU ban, one trader said on Monday.
The Green Exchange aimed to address that uncertainty with its new contract, it said.
“The specifications of the CERplus product are robust yet flexible enough to correspond to any change in EU legislation,” said Henrik Hasselknippe, managing director for global product development.
