Launched by CME Group, CBL Global Emissions Offset™️ (GEO®) futures trade on the world’s largest carbon offset exchange—Xpansiv market CBL. GEO contracts represent the growing maturity of this industry, creating a benchmark that other contracts can be priced against. GEO contracts are screened by three of the world’s leading carbon registries and represent an internationally recognised standard to help investors participate in the VCM with confidence. Benchmark contracts like the GEO also provide the transparency required to scale markets and effectively tackle carbon reduction.
The result of these developments is the emergence of a carbon market for spot and futures contracts that are as tradeable and dependable as any other asset class that sits among investment portfolios globally, like foreign exchange derivatives or interest rate futures.
The advent of the GEO carbon benchmark product provides two distinct advantages: it provides users with a liquid, high-quality instrument that is subject to stringent eligibility criteria; and it provides a basis from which to price other contracts across the quality spectrum, helping ensure participants trade at the right price for the right contracts.
As government and the private sector come together to target CO2 more aggressively, the development and utilisation of the voluntary carbon market are sure to accelerate. I believe that growing confidence in carbon offsets and increased collaboration between compliance and voluntary markets will result in a better outcome for all, empowering ambitious targets to become a reality much sooner than would otherwise be possible.
There is no ‘us versus them’ when it comes to voluntary and compliance markets – we share the same goal of achieving net zero, and we need all available tools in the toolbox to achieve that goal.