Xpansiv to Launch CBL GEO® CORSIA Phase 1 Standardized Contract April 29
NEW YORK, LONDON, SYDNEY — Xpansiv, the leading infrastructure provider for the global energy transition markets, today announces plans to launch its highly anticipated CBL GEO® CORSIA first compliance phase (GEO CP1) standardized spot contract on April 29.
The new contract will trade on Xpansiv’s CBL spot exchange and be simultaneously available on partner exchanges, the Aviation Carbon Exchange (ACE), operated by CBL in partnership with the International Air Transport Association (IATA), as well as the Johannesburg Stock Exchange’s JSE Ventures Carbon Market.
The planned launch aligns with the timetable for the supply of CORSIA Eligible Emissions Units (EEUs) to be expanded following the approval of additional standards and methodologies in late 2024 by the advisory body to the United Nations International Civil Aviation Organization (ICAO), which governs the program. ICAO recently projected that 100-150 million tons of EEUs would be needed to meet cumulative offsetting demand from the aviation sector during the first compliance phase.
“The transition into the compliance phase of CORSIA is a watershed moment for the rapidly converging voluntary and compliance carbon markets,” said John Melby, CEO, Xpansiv. “Our new GEO CP1 contract has been carefully designed based on an extensive market consultation, which revealed a clear consensus to launch the contract only when deliverable supply was available and sufficient clarity around the ICAO framework was achieved. Those conditions have now been met.”
The new contract launch will follow the recent CORSIA Phase 1 EEU procurement events held by IATA, the government of Guyana, Mercuria, and Xpansiv via the ACE. The most recent event, at which EEUs were sold for $22.25 per ton, closed March 21. The ACE has now facilitated the sale of CORSIA credits to 15 airlines with more than 35 airlines participating and will continue to host quarterly events to provide airlines with access to EEUs.
“The introduction of standardized instruments is a key step in the development of the EEU market, which is central to the CORSIA program,” said Marie Owens Thomsen, IATA’s Senior Vice President, Sustainability and Chief Economist. “As with our well-received procurement events, listing CBL’s new standardized contract on our transparent ACE marketplace will benefit our airline members by providing clear price signals for the budgeting and procurement of CORSIA EEUs.”
The new standardized contract aligns closely to the CORSIA EEU eligibility criteria. Upon launch, deliverable EEUs into the contract will be sourced from ART TREES, ACR, Climate Action Reserve, Gold Standard, and Verra. EEUs from additional approved registries may be deliverable as they are tagged as CORSIA-eligible. Eligibility tags automatically flow from registries as they are applied into the Xpansiv Connect portfolio management system.
In addition, an innovative sub-account structure developed for the IATA EEU procurement events will be available for use with the GEO-CP1 contract. The structure enables participants to trade the contract without having primary accounts at all the standards that issue EEUs deliverable into the new contract.
Xpansiv’s original CBL GEO contract, launched in 2020, was aligned with the pilot voluntary phase of CORSIA. The contract, which was the first standardized VCM contract, proved the benefits of a standardized, CORSIA-aligned contract and was widely used by companies not only in aviation, but across industries.
In March 2021, CME Group launched a CBL GEO futures contract based on the CBL spot GEO. To date, more than 250 million tons of carbon have been traded through the pilot-phase CBL GEO spot and futures contracts.
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Media Contact: pr@xpansiv.com
Market Contact: exchange@xpansiv.com or aviation@cblmarkets.com
