Financial products developer IncubEx and trading platform Nodal Exchange plan later this month to launch an array of new contracts for renewable energy certificates (RECs), voluntary carbon products and renewable natural gas certificates.
Pending regulatory approvals, Nodal will list the new products beginning on 17 June, the companies said today. The new offerings would include contracts for two types of RECs, renewable natural gas certificates and new varieties of voluntary carbon offsets.
The carbon offsets include futures and options for nature-based and Carbon Offsetting and Reduction Scheme for International Aviation-eligible (CORSIA) verified emission reductions, as well as futures contracts for global emission reductions, certified emission reductions (CERs) and carbon removals.
CERs are the largest supply of global carbon offsets and can be used toward numerous emissions-tracking commitments, including obligations under the Kyoto Protocol, Paris agreement and CORSIA as well as for voluntary goals. Nodal will offer CER commitment period 2 futures contracts for vintage years including 2013-20 consistent for use with Kyoto commitments, CER 2013+ for vintages including 2013-20 consistent with Paris requirements, and CER 2016+ for vintages including 2016-20 consistent with CORSIA requirements.
"With the new listings, we will launch the broadest set of voluntary carbon offset products on any exchange, which is reflective of the numerous methodologies and project types in the underlying carbon offset market," IncubEx president Dan Scarbrough said.
New RECs futures will include credits from wind projects listed by the Center for Resource Solutions (CRS) as eligible for the Green-e program and located in the Western Electricity Coordinating Council territory, which spans 14 western US states, the northern portion of Baja California in Mexico and the Canadian provinces of Alberta and British Columbia. Nodal will offer front- and back-half vintage 2021-2030 futures for these RECs.
RECs associated with the Green-e program are often sought by companies with voluntary goals to decarbonize their electricity use. CRS lists facilities eligible to produce RECs that can then be certified under its Green-e program, which allows projects that have begun operation or have undergone significant upgrades within the past 15 years.
For compliance markets, Nodal will add futures for vintages 2022-2030 NEPOOL quad-qualified RECs, which can satisfy Class I or equivalent mandates in Massachusetts, Connecticut, New Hampshire and Rhode Island. The contract is distinct from the one for dual-qualified NEPOOL credits, which represents RECs usable for Class I carve-outs of the Massachusetts or Connecticut renewable portfolio standards.
Nodal's new renewable natural gas contracts will deliver renewable thermal certificates (RTCs) issued by the Midwest Renewable Energy Tracking System (M-RETS) for eligible biomethane or renewable natural gas injections into US distribution or interstate pipelines.
RTCs function similarly to RECs and can come from methane capture projects such as those for animal manure, wastewater facilities and landfills, which qualify based on a carbon-intensity evaluation. Companies and utilities with emissions goals can use thermal credits to cover their natural gas footprints similarly to how they use RECs to source electricity to wind and solar farms.
