MGEX will provide support and services for a spot market exchange trading allowances and offsets in the state-based program.
The California Cap-and-Trade program is designed to limit greenhouse gas emissions by establishing an annual cap on carbon emissions. As the program continues to expand by linking to other programs such as the Québec Cap and Trade System, and introducing additional covered entities such as transport fuels, the need for an open and transparent exchange is all the more important.
“This partnership will enable CTX to provide a simple, secure and transparent spot exchange service for U.S. carbon market participants, enabling businesses to meet their compliance obligations in an efficient and cost-effective way,” said CTX Chief Operating Officer and President of CTX USA Nathan Rockliff. “We look forward to working with MGEX to deliver the infrastructure required to boost market liquidity and growth.”
Once approved by the California Air Resources Board (ARB), CTX will be the first exchange to offer an automated, fully collateralized, and settled intra-day spot trading venue for products in the California Cap-and-Trade program. The exchange will electronically connect with Wells Fargo’s system, ensuring the safe, secure and easy management of participant funds and will enable same-day delivery of both allowances and offsets within the ARB registry, subject to opening an account.