Carbon Trade Exchange to launch RGGI spot market
Washington, 11 September (Argus) — The Carbon Trade Exchange (CTX) will launch a physically settled spot market for Regional Greenhouse Gas Initiative (RGGI) CO2 allowances on 28 September.
The exchange will facilitate electronic trading by parties with accounts in RGGI’s allowance tracking system, known as COATS. Wells Fargo bank will handle financial clearance of transactions.
The spot platform would provide “a transparent and low-cost solution” for transacting RGGI allowances, CTX USA president Daniel Scarbrough said. The exchange could serve as an alternative to the Intercontinental Exchange, a futures exchange where most RGGI transactions have occurred since the cap-and-trade program’s start in 2008.
CTX anticipates an increased role for spot trading in the coming years, as the RGGI secondary market itself has grown substantially in the past couple years. Traded volumes last year, including options, totaled about 150mn short tons, a 50pc increase from 2013, as program changes that took effect at the start of 2014 led to more activity in the secondary market.