Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced plans to launch the first environmental futures market based on Alberta’s carbon program.
ICE plans to launch physically delivered AB Emissions Offsets Futures (AEO) and AB Emissions Performance Credit Futures (AEPC) at ICE NGX, ICE’s physical energy exchange and clearing house based in Calgary, Canada. A range of past and future vintages eligible for compliance within Alberta’s Technology Innovation and Emissions Reduction (TIER) program will be available. The contracts are anticipated to launch in the third quarter of 2023, subject to regulatory approval.
Alberta’s TIER program seeks to manage Alberta's greenhouse gas emissions through a compliance market where entities covered under the system, including those which emit 100,000 tons or more of carbon dioxide equivalent per year or import more than 10,000 tons of hydrogen annually, have annual compliance obligations. ICE’s new futures contracts will let entities buy, sell, and hedge their exposure to the credits and the escalating Alberta TIER fund price required by the program.
“We have worked to ensure the design of this market meets the requirements of Alberta’s environmental program and is tailored to the needs of our clients who currently participate in this market,” said Greg Abbott, President at ICE NGX. “An Alberta carbon physical futures market brings price transparency and attracts new participants, while allowing clients to access greater liquidity and capital efficiency. Alberta TIER coming to ICE means these contracts will be traded alongside ICE’s global environmental and energy benchmarks across carbon, oil, natural gas, and power, and cleared alongside Alberta natural gas and electricity.”
The contracts will be cleared at ICE NGX, bringing physical delivery and payment assurance, as well as stronger measures to protect participants against the potential invalidation of credits under the program following delivery.
ICE NGX has operated the Alberta natural gas and electricity futures markets for nearly three decades, developing the AB-NIT ("AECO") hub into one of the most liquid spot and forward energy markets in North America.
ICE is a leader in global energy and environmental markets. Since launch, over 100 billion carbon allowances, 350 million renewable energy certificates, approximately 6 billion carbon credits, and the equivalent of 5 billion Renewable Identification Numbers have traded on ICE. Environmentals are part of ICE’s extensive global commodity markets where open interest is up 12% year-over-year at 52.6 million contracts.
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.
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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 2, 2023.
Source: Intercontinental Exchange