ICE Introduces Nature-Based Solutions Carbon Credit Future

Published on: 10 May 2022 06:00 PM
by KnowESG

The Intercontinental Exchange (ICE) recently announced that it had created a nature-based solutions carbon credit futures contract to help the voluntary carbon market receive price signals.

Nature-based solution (NBS) carbon credits can be obtained through projects such as tree planting, agricultural operations, and the preservation of forests that would otherwise be destroyed.

Gordon Bennett, Managing Director of Utility Markets at ICE, said:

"The NBS future is our first contract specifically designed to measure carbon sequestration and storage capabilities of nature, which we hope will be an important valuation tool to conserve and grow the world's natural capital base."

According to ICE website statistics, the December 2022 ICE NBS futures contract is trading at $11.25 per tonne at 1109 GMT.

Many multinational corporations, including Shell, have committed to achieving net-zero emissions and have stated that they will attempt to use certain nature-based credits to help compensate for carbon reductions that they could not cut through their operations.

Bill McGrath, Shell's General Manager for Global Environmental Products, said:

"The launch of the ICE Nature-Based Solutions Carbon Credit Future is another important milestone in bringing more transparency and scale to the voluntary carbon market."

Several other corporations, including trading houses Trafigura and Vitol, were pleased with the new pact. Carbon credits have been certified by non-profit Verra as part of the deal.

Source: Reuters