Chicago Climate Futures Exchange® Successfully Lists Futures Contracts

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Chicago Climate Futures Exchange’s Carbon Financial Instrument®- U.S. Allowance futures (CFI®-US) contract offers the first tool for directly hedging exposure to possible future U.S. carbon allowance prices, as well as whether and when a U.S. federal greenhouse gas emission reduction mandate is established.

Chicago Climate Futures Exchange® (CCFE®), a Commodity Futures Trading Commission (CFTC) Designated Contract Market, announces the successful listing of new Carbon Financial Instrument-U.S. Allowance futures (CFI-US) for CFI futures contract expirations occurring 2013 and later, as an enhancement to its CFI futures contract.

The CFI-US calls for delivery of greenhouse gas emission allowances that would be usable for compliance under a mandatory federal U.S. cap-and-trade program. Delivery of other specified mandatory CO2 allowances would be required if a U.S. federal mandatory program is not enacted when contracts expire in 2013 and later.

CCFE Members yesterday traded forty-two CFI-US futures contracts, representing 42,000 metric tons of carbon dioxide allowances. These trades mark the first exchangebased transactions for delivery of emission allowances that would be usable for compliance if the U.S. adopts a mandatory federal greenhouse gas cap-and-trade program.

Futures contracts that expire in December 2013, 2014 and 2015 were traded, with prices ranging from $11.75 to $15.00 per metric ton of carbon dioxide.

Shell Energy North America, a customer of NewEdge Group, was a party to the first-ever exchange transaction in this new product.

“As a leader in emissions credits and renewable energy marketing and trading, we are very pleased to support the launch of the Chicago Climate Futures Exchange’s federally mandated U.S. Greenhouse Gas allowance product and to be a counterparty to the first trade of this product on the exchange,” said Mark Quartermain, president of Shell Energy North America. “Our participation in the CCFE complements Shell’s commitment to provide responsible energy solutions that reduce climate change while maintaining a diverse network of supply that helps meet North America’s and the world’s growing energy needs. This diverse supply includes renewable energy and future fuels in addition to traditional energy sources, such as natural gas and crude oil,” Quartermain explained.

A diverse group of industrial and financial players were involved in the opening day of CCFE CFI-US futures transactions. Some of the financials included C-Quest Capital LLC, Digilog Global Environmental Master Fund, Environmental Capital Management, Green Fund LLC, Infinium Capital Management LLC and Royal Bank of Canada.

Dr. Richard L. Sandor, Chairman and CEO of Chicago Climate Exchange said, “Our customers requested a tool for hedging U.S. carbon policy and allowance prices. Listing these new contract expirations on the same day President–elect Obama crisply repeated his intention to implement a carbon cap-and-trade program further validates the astuteness of our Member’s in anticipating policy developments.”

Ken Newcombe, CEO of C-Quest Capital, LLC in Washington DC stated, “We are thrilled to be trading on the CCFE and supporting the pioneering efforts of the Chicago Climate Exchange. The new contract provides a very important price point not only for industry, but those who will provide offsets under the U.S. mandated carbon market.”