Tighter emissions caps are driving more Australian companies to trade, while international players controlling facilities like power stations and mines are also entering the market. As the market matures, brokers are moving from over-the-counter (OTC) trades to more sophisticated derivative products, such as futures, forwards and options.

Derivatives exchange CME is catering to Australian companies as they shift towards exchange trading, partnering with exchange platform Xpansiv to launch an ACCU futures contract this month. The Australian Securities Exchange (ASX) launched its own carbon futures contract in July.

Xpansiv CEO Ben Stuart believes derivatives will give companies greater control over carbon risk management, predicting more sophisticated hedging strategies as participation grows.

“The market has evolved to a point now where a derivatives market makes sense, and the need for forward hedging is really essential to managing risk,” he said.

“Ultimately, that’s what the futures contracts are for, so you start to manage price exposure using more long, dated contracts out the curve.”

Xpansiv, a leading provider of market infrastructure for the global energy transition, announced the acquisition of key assets from PineSpire, a company specializing in revenue management services for low-carbon fuel programs across California, Washington, Oregon, and Canada.

“Xpansiv and PineSpire share a common vision, and we are eager to leverage the capabilities of both organizations to deliver optimal customer outcomes,” said Janet Mihalyfi, President of Managed Solutions at Xpansiv. “PineSpire’s management team has a proven record of excellence and innovation, which will enable us to expand our leading presence in low carbon fuels and RECs.”

Thes acquisition is part of Xpansiv’s ongoing strategy to reduce market fragmentation and provide scalable benefits to its customers by consolidating key operators in the low-carbon fuel standard (LCFS) and renewable energy credits (REC) sectors.

Global carbon exchange Xpansiv has partnered with Sydney-based climate data analytics provider Vyzrd to help companies quantify financial risk from climate change, meet climate reporting requirements and implement supply chain decarbonisation.

Xpansiv plans to integrate its environmental commodity market data with Vyzrd’s climate risk and net-zero platform, it said.

The AI-enabled platform quantifies the financial, strategic and operational implications of climate change as well as environmental, social, and governance standards on company performance and valuation.

More than 30 countries, representing over 60% of global GDP, have introduced mandatory climate-related financial disclosure for companies, according to Xpansiv.

Enechain, an online wholesale electricity exchange, has partnered with Xpansiv, the world’s largest environmental spot trading company.

In an interview with NIKKEI GX, President Ryo Nozawa said, “We want to solve the problem of low supply in Japan” by making it possible to purchase Xpansiv’s carbon credits. The company has revealed its intention to aim for 100 million tons of carbon dioxide (CO2) equivalent by 2028. 

Xpansiv has attracted trades from several players during the first day of trading in standardised Global Emissions Offset (GEO) contracts aligned with stipulations from the main supply-side integrity initiative in the voluntary carbon market.

The global carbon exchange said 37,606 tonnes of carbon dioxide equivalent were traded Wednesday in GEO contracts aligned with Core Carbon Principles (CCP) drawn up by the Integrity Council for the Voluntary Carbon market (IC-VCM).

“The transactions included 10,000 tonnes of ACR, 15,606 tonnes of Climate Action Reserve, and 12,000 tonnes of Verra credits traded through their respective CBL CCP GEO registry-specific contracts,” Xpansiv said in a statement.

Xpansiv said Mercuria Energy America, ClimeCo, ElectroRoute, Valitera, South Pole, and Cross Stone Capital had all participated in the inaugural day’s trading in the new contracts.

Xpansiv, who runs the world’s largest spot exchange for international voluntary carbon credits, has announced a partnership with Enechain Corp., which allows Japanese companies to access hundreds of project-specific carbon credits and standardized contracts through Enechain’s Japan Climate Exchange (JCEX), Xpansiv said in a statement late July 12.

After connecting with Xpansiv Connect, Japanese companies can access large volume of voluntary carbon credits, including those aligned with the ICVCM Core Carbon Principles and CORSIA, as well as International Renewable Energy Certificates (I-RECs), which are channeled to JCEX from Xpansiv’s market infrastructure and CBL exchange…”