Macquarie Energy Canada Ltd., using a virtual market, is expanding the ethically produced natural gas trade, aka responsibly sourced gas (RSG), with the sale of British Columbia (BC) production to Montreal-based distribution company Energir. The Macquarie unit used… the Xpansiv Digital Fuels Registry to make the deal for supplies from Calgary-based gas producer Pacific Canbriam Energy Ltd.

The digital registry “is an important innovation that establishes unprecedented levels of transparency and detail, which will further catalyze the certified natural gas market,” said Macquarie senior managing director Craig Fisher.

“The certification marks the beginning of a new, more transparent era of natural gas development in Canada where we show the world that resources are, and will continue to be developed to the highest standards of environmental and social responsibility,” said Pacific Canbriam President Paul Myers.

Pacific Canbriam Energy, an Alberta producer that operates exclusively in the B.C. Montney formation, recently received certification from Equitable Origin, which provides ESG certification for energy companies. The certification was part of what is being billed as the “first-ever” responsibly sourced gas supply agreement in Canada, under which the Quebec natural gas utility, Energir, will source natural gas from Pacific Canbriam.

The certification considers all ESG metrics, and one of them is greenhouse gas (GHG) emissions intensity… Under the agreement signed with Energir, a service provided by Xpansiv uses real-time data to identify the physical gas from Pacific Canbriam to produce a digital certificate that verifies that the gas Energir receives matches the gas shipped from its EO100-certified suppliers.

“The volumes for both N-GEO and GEO spot contracts are larger than we anticipated, with more than 10 million tons of carbon traded to date,” said Andy Bose, head of ecosystems and partnerships at Xpansiv, which provides settlement services through its CBL exchange.

This week, CME Group announced the market trading debut of [the CBL] Nature-Based Global Emissions Offset (N-GEO) futures contract. The notional equivalent of more than 1.3 million environmental offsets had traded in the first two days of trading, with participation from 10 firms, including Andurand Capital Management, Hartree Partners, Macquarie Group and commodities giant Vitol.

“This is another important milestone in the evolution of the voluntary carbon markets,” said Erik Petersson, Head of Global Carbon at Macquarie Group’s Commodities and Global Markets division. “At Macquarie, we are focused on high-quality carbon offset supply and the provision of market-leading offset solutions to our clients. This new futures product enhances our and our clients’ ability to manage price risk around the nature-based solutions portion of the market. We expect this to drive broader participation in the voluntary carbon markets as transparency and liquidity increase.”

As voluntary emissions reduction (VER) prices continued to bubble up across all offset categories this week, CME on Monday saw companies execute the first trade in its [CBL Nature-Based Global Emissions Offset] (N-GEO) futures contract, listed under commodity code NGO. Trading house Hartree Partners and hedge fund Andurand Climate and Energy Transition Fund participated in the inaugural N-GEO futures transaction, trading 200,000 credits at $5.40/tonne for Dec-21 delivery. Brokerage Evolution Markets facilitated the transaction.

“We see CME’s N-GEO futures contract as a milestone in the continued growth of carbon assets,” Casey Dwyer, co-portfolio manager of the Andurand Climate and Energy Transition Fund, said.

This month, Xpansiv had an enormous amount of positive news, all of which can be summed up with the single word “momentum.” The firm announced that 2Q21 trading volumes on its CBL Markets platform had increased by 374% over the same quarter in 2020, and that investors had traded more than 50 million metric tons of carbon year-to-date. This carbon volume works out to an increase of more than 60% compared to the carbon traded on CBL in 2020 – and we’re barely halfway through the year!

Xpansiv said it handled a record 25.84 mln carbon offset transactions over Q2, up by a third on the previous quarter and a massive 374% year-on-year. Its GEO contract transacted 2.29 mln, while its N-GEO – which began trading Apr. 19 – saw 2 Mt change hands during the quarter. This included the first physical delivery of GEO spot contracts to settle the GEO futures traded on CME Group’s NYMEX exchange. CME intends to launch its N-GEO futures contract in August.