Record number of California Carbon Offsets trades in June on ICE

1 Jul 2021

Quantum Commodity Intelligence - A record high number of California Carbon Offset (COO) futures traded in June on the intercontinental Exchange as demand surged, the bourse reported Thursday.

Some 760,000 COO futures changed hands last month, around 40% of the 1.9 million mt of volume seen in the market since ICE launched the future in April 2019.

The North American environmental futures and options complex, which comprises California Carbon Allowances (CCAs), California Carbon Offsets (CCOs), Regional Greenhouse Gas Initiative Allowances (RGGI), Low Carbon Fuel Standard (LCFS) Credits, and Renewable Energy Certificates (RECs), has seen a surge in demand this year.

Open interest in the various contracts offered by ICE hit a record high of 1.1 million on June 25, the exchange reported.

Around 6.9 million mt of carbon dioxide changes hands currently in ICE’s CCA market, and open interest in CCA futures and options stood at 445,451 contracts as of June 28.

The smaller RGGI futures market on ICE has seen 121,319 contracts traded over the first six months of the year, with average daily volumes up 69% year-on-year.

North America has been the driving force in the expansion of ICE’s global carbon business, which includes the EU Emissions Trading System, the world’s largest market.

The number of participants trading ICE carbon futures and options worldwide increased 40% between 2017 and 2020.

North American participants drove the growth, with the numbers rising by 70%.