California Emissions Trading Scheme (CA ETS)
On October 20, 2011, The California Air Resources Board (ARB) finalized the rules for the state’s greenhouse gas market-based compliance program. The California Emissions Trading Scheme (Cal ETS), which will govern sources that attribute approximately 85% of California’s emissions, is scheduled to begin on January 1, 2013, after being delayed one calendar year. With 2.5 billion allowances under the cap between 2013 and 2020, California’s cap and trade program will be the largest program in North America, and second only to the EU ETS in the world.
The program is divided into three multi-year compliance periods. The first compliance period (2013-2014) will cover electricity generating and industrial facilities exceeding 25,000 MT CO2e per year. The second (2015-2017) and third (2018-2020) compliance periods will include transportation fuels.
Green lists the California Carbon Allowance (CCA) Futures and Options contracts for market participants to hedge their exposure to carbon dioxide equivalents. The underlying asset of the GreenX CCA Futures contract is the government-issued California Greenhouse Gas Allowance. One California Greenhouse Gas Allowance will permit a compliance entity to emit one ton of carbon dioxide equivalent[1] (“CO2e”). The GreenX CCA is currently listed for electronic trading on CME Globex, and submission for clearing through CME ClearPort. Click here for an overview of the GreenX CCA contract.
