Platts to begin publishing daily settlement prices for Xpansiv, CME CBL Carbon Credit Contracts

S&P Global Platts, in partnership with Xpansiv, will begin publishing daily settlement prices for Xpansiv's four carbon credit contracts from February 14, 2022, and daily settlement prices for 48 forward months of CME CBL GEO and CBL N-GEO futures contracts from May 23.

This announcement follows on from the partnership agreement between Platts and Xpansiv, the global marketplace for ESG commodities, on November 18, 2021 and available here: https://press.spglobal.com/2021-11-18-S-P-Global-Platts-and-Xpansiv-Partner-to-Advance-Price-Transparency-in-Global-Carbon-Markets.

As part of this agreement, Platts has already begun assessing the daily settlement prices for Xpansiv's Global Emissions Offset (GEO) contract, Nature-Based Global Emissions Offset (N-GEO) contract, and Core Global Emissions Offset and Core Global Emissions Offset Trailing (C-GEO and C-GEO Trailing) contracts. Platts is also assessing the daily settlement information for CME's CBL GEO and CBL N-GEO physically delivered futures contracts for 48 forward months.

Platts is launching daily publication of settlement prices for the four Xpansiv spot market contracts and 48 CME CBL forward month futures contracts as part of its commitment to additional market transparency around the methodology employed to assess these settlements each day.

Platts assesses the Xpansiv GEO, N-GEO, and C-GEO and C-GEO Trailing spot market contracts using bids, offers and transactions from the Xpansiv CBL marketplace and assesses the CME CBL GEO and CBL N-GEO 48 futures contract months using data from the CME exchange. Both the Xpansiv spot market carbon credit settlements and the CME futures settlements are assessed at the 2:30 pm New York close.

Platts' Xpansiv carbon credit settlement assessments reflect a minimum volume of 1,000 mt. Bids, offers and transactions of smaller volumes may not be considered in the settlement price. Platts' CME carbon credit assessments reflect a minimum volume of one lot, or 1,000 environmental offsets.

Platts' Xpansiv and CME Carbon Credit settlements follow the methodology principles outlined in the Platts Methodology 1-6 Guidelines available here: https://www.spglobal.com/platts/plattscontent/_assets/_files/en/our-methodology/methodology-specifications/platts-assessments-methodology-guide.pdf

Platts considers bids, offers and transactions for both outright contracts and contract spreads that have demonstrated properly tested market value through a systematic, ordered improvement. Indications that are not seen to test value may not be considered for the assessment. For example, if a GEO offer at $10/mtCO2e is traded but the corresponding bid is at $9/mtCO2e, and other market information indicates value close to the bid, the trade may be considered unrepresentative and not reflected in the final assessment.

Platts typically assesses above outstanding bids and below outstanding offers, with live market information at the 2:30pm close taking precedence over earlier trades either conducted directly through the exchange platform or blocked in separately. For example, a live bid at $9/mtCO2e would take precedence in the assessment over a trade executed earlier in the session at a lower price.

In the absence of definitive market information at the close, Platts may consider related market information. This may include information from other Xpansiv spot contracts in the case of spot assessments (eg NGEO for GEO), as well as reported and published over-the-counter market information.

For futures assessments, Platts considers outright and time spread market information, but prioritizes outright information in the final assessment. If bids and/or offers for an outright contract conflict with values implied from time-spreads, the final assessment will reflect the outright price information.

Platts may consider block trades in its assessments, but priority is given to live exchange data in all instances.

Platts does not use volumetric weighted averages in its Xpansiv and CME carbon credit settlement assessments.

Price is a function of time, and the evolution of price throughout the day is an important consideration when looking at the price assessment at the 2:30pm New York Close.

On February 14, the daily settlements for the Xpansiv carbon credit assessments will be available via the CBN market data category on the new Energy Transition and Carbon Markets Alerts Service lines on pages ETA2014 and CMA2014, in the new Carbon Markets Daily publication, on Platts Dimensions Pro and in the Platts Pricing Database under the below codes:

Platts will begin publishing the CME GEO and N-GEO futures contracts on May 23 and will provide publication details closer to this date.

The Platts GEO, N-GEO, C-GEO, and C-GEO Trailing settlements reflect the standards set out in the Xpansiv contract terms available here: https://pub.lucidpress.com/CBL-Standard-Instruments-Program/#ORDanw3c8CKo

The Platts CME CBL GEO and N-GEO futures reflect the standards set out in the CME contract terms available here:

https://www.cmegroup.com/markets/energy/emissions/cbl-nature-based-global-emissions-offset.contractSpecs.html

Please send any feedback to Platts_Carbon@spglobal.com and pricegroup@spglobal.com.

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