The Australian Stock Exchange has listed three Environmental Futures contracts, marking the next maturity phase for carbon and renewable energy markets in Australia and New Zealand.
These new contracts allow participants to price and hedge emissions reduction risk amid the transition to a lower carbon economy. They represent the first carbon futures contracts to launch in Australia and New Zealand.
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The three futures contracts are available for trading on the ASX 24 Market and include physically delivered Large Generation Certificate (LGC) Futures, Australian Carbon Credit Unit (ACCU) Futures and New Zealand Unit (NZU) Futures.
ASX head of commodities Daniel Sinclair said, “As Australia moves from a voluntary to compliance-led carbon market in step with other global jurisdictions, derivatives markets can play an essential role.
“The transition to clean energy, by definition, is uncertain, and ASX-hosted Environmental Futures will be a key instrument in managing risk and supporting the net zero targets of organisations and policymakers.”
Australia’s carbon market is poised for its next stage of development and is set to be one of the world’s largest producers of carbon credits over coming years. Recent data from the Clean Energy Regulator shows that around half of all ACCUs now sit in the registry accounts of safeguard or safeguard related entities alone.
ASX’s Environmental Futures are part of a broader ecosystem of current and planned futures and options contracts across electricity, gas and environmental markets.
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“Building from our core electricity products and driven by strong market demand, ASX intends to develop a diversified and integrated transitional product ecosystem that helps our customers to price and manage the risk and uncertainty of the energy transition,” Sinclair said.
“A liquid and transparent Environmental Futures market will give organisations greater visibility and confidence to support ongoing investment in renewable energy and carbon abatement projects. This will ultimately help mobilise capital towards meeting longer-term emissions targets.”
