Emissions bourse operator Carbon Trade Exchange (CTX) will open its spot market for RGGI allowances on Jan. 15 after having delayed the launch for more than three months.
A spokeswoman for the exchange said the offering was put on hold as CTX sought to build a “critical mass of participants”, giving them more time to set up their accounts and get approval from their compliance departments.
The spot market, which will be open every US business day from 1000 to 1600 EST, is poised to offer the first cleared, physically-settled instrument for a mandatory US carbon market.
The contract will initially be centred on vintage 2015 allowances, but will allow delivery of vintages from years prior to that if they remain eligible for compliance.
RGGI allowances, also known as RGAs, are currently mainly traded via futures and options contracts on commodity and energy exchange ICE.
Similar to those derivatives, CTX’s spot lot size has been set at 1,000 RGAs, equivalent to 1,000 short tons of CO2 (907.2 metric tonnes).
The online spot platform will be linked to the Wells Fargo cash clearing system, interfacing with the RGGI market’s registry, known as the CO2 Allowance Tracking System (COATS).
CTX said it can facilitate electronic trading through its secure, web-based platform or the clearing of over-the-counter (OTC) trades from the brokered market.
CTX also operates a global, online platform for trade in voluntary carbon credits, known as VERs.
By Mike Szabo – firstname.lastname@example.org