MINNEAPOLIS, MINNESOTA, U.S. – CBL Markets, an exchange operator for environmental commodity markets, and the Minneapolis Grain Exchange, Inc. (MGEX), a Designated Contract Market and Derivatives Clearing Organization registered with the U.S. Commodity Futures Trading Commission, announced the first trade on the California Carbon Allowance (CCA) spot contract.
The CCA contracts launched by CBL Markets on Oct. 14 represented individual spot contracts across vintages 2015 through 2019. The first trade was a vintage 16 CCA that after some strong buy side support on the exchange eventually saw the price of $12.84 being transacted.
“Our first trade in the California Cap and Trade market represents an important and exciting milestone for CBL Markets,” said Ben Stuart, head of Global Markets at CBL Markets. “We are committed to driving liquidity into the underlying environmental markets through our unique spot cleared product, and look forward to further expanding our offering in U.S. environmental commodities.”
The partnership between CBL Markets and MGEX was announced in 2015, with MGEX providing support and services for a spot market exchange trading allowances and offsets in the state-based program. The California Cap-and-Trade Program is second in size only to the E.U. Emissions Trading Scheme based on emissions covered, and provides an example of how an economy-wide cap-and-trade system can function in the U.S.
“Our expansion into environmental markets is an exciting and natural transition for MGEX following a long history in agricultural markets” said Mark G. Bagan, president and chief executive officer, MGEX. “We look forward to continuing this partnership with CBL Markets as we identify new markets and opportunities to pursue.”
CBL Markets is the only exchange offering cleared spot trading of environmental commodities in the Regional Greenhouse Gas Initiative (RGGI) and now the California Cap-and-Trade Program.