CHICAGO, Jan. 26 (Xinhua) -- CME Group announced on Tuesday that it will launch a Global Emissions Offset (GEO) futures contract on March 1, 2021, pending all relevant regulatory reviews.
The new contract will provide customers with a market-based solution to manage global emissions risk, said CME Group.
The GEO futures contract is based on the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which includes globally accepted carbon offset standards based on a set of rigorous criteria developed by the International Civil Aviation Organization (ICAO), a specialized agency of the United Nations.
GEO futures will allow for delivery of CORSIA eligible voluntary offset credits from three ICAO approved registries and will be listed by and subject to the rules of NYMEX.
Voluntary offsets allow businesses to purchase credits to help reduce their overall carbon footprint as they work to transition to more sustainable business practices. The scale of trading in the voluntary carbon offset market is currently around 320 million U.S. dollars, and is expected to grow as demand for global decarbonization increases and climate hedging strategies become more standardized.
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