GIC says Commodity-plus-carbon contract expected to launch in 2013

January 28, 2013 |

In Washington, GIC Group said that it has reached 60% completion in Stage 2 Proof of Concept with its CPC (Commodity Plus Carbon) futures contract and said that it expects to launch the project in Q3 2013. A CPC derivative contract is based on the underlying value of commodities that feature GHG reducing traits or are produced with GHG reduced practices.

The CPC targets individual commodities (cocoa, canola, ethanol, industrial-use corn, etc.), and bundles the value of a producer’s carbon reduction practices with the value of the physical commodity.

The CPC contract allows investors to hedge the value of verifiable GHG reductions, in international transactions as well as regional and international voluntary markets.

The news from GIC comes as regional carbon markets expanding in Europe, Australia, North America, and China – prices of international emissions allowances (AAUs, CERs, ERUs, and RMUs) have dropped, trading volumes have continued to grow. Point Carbon projects that California Carbon Allowances (CCAs) will reach $70/ton by 2020.

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Category: Fuels

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