Carbon Market Round Up: October 2023

By: Andrew Hall

5 minutes
Farms in a mountainous region.

The Carbon Monthly Series provides a window into pricing movements of key compliance and voluntary markets and broader market trends.

Voluntary Market Updates

Airbus Signs easyJet As Partner for its Carbon Removal Initiative(1)

Airbus signed a contract with British low-cost airline, easyJet, making easyJet the first partner for Airbus' Carbon Capture Offer program. Through its initiative, Airbus will use offsets from Direct Air Capture technology to offer airlines removal credits. The removals serve as a complement to the use of sustainable aviation fuel. Airbus' program will be supplied through its purchase of 400,000 metric tons of removal offsets from 1PointFive in a previously announced transaction.

Rubicon Carbon Announced Partnership with CHOOOSE(2)

Rubicon Carbon announced a strategic partnership with CHOOOSE, a leading climate action SAAS platform. Together, CHOOOSE and Rubicon will offer an integrated suite of products and services, from precise emissions calculations and automated reporting to seamless transaction management. The underlying portfolios will track back to Rubicon's proprietary Rubicon Carbon Tonne ("RCT") product. RCTs are backed by an inventory of verified and broadly diversified carbon offsets. In combining both companies' expertise, this partnership will provide clients with a range of options for addressing their carbon footprints.

The White House Announces Fast-Track Action Committee on Marine Carbon Dioxide Removal(3)

The White House Office of Science and Technology Policy ("OSTP") announced a new Fast-Track Action Committee on Marine Carbon Dioxide Removal ("CDR") this month. Over the next year, the Committee will develop an implementation plan and relevant policy and research to advance marine CDR and guide deployment decisions. The Committee efforts build on and help unify an already growing federal investment in marine CDR research. Marine CDR is another method of CO2 removal and may include solutions such as altering the chemical composition of sea water so that the ocean absorbs more CO2 or using electrochemical techniques to remove dissolved CO2 from seawater and storing it underground. Marine CDR solutions have the potential to counterbalance emissions from hard-to-abate sectors as well as remove legacy GHG emissions.

Tokyo Stock Exchange Now Trading Carbon Credits(4)

On October 11th, the Tokyo Stock Exchange ("TSE") launched a new carbon offset market. Under the new market rules, registered members will be able to trade the existing carbon credit, known as J-Credit, on the TSE. The trading system is based on a government certification of GHG emissions reduced or removed through renewable energy mechanisms, energy-saving, and forest management. The new market will create a more efficient, liquid and transparent platform through which to trade J-Credits. Earlier this year, Japan introduced a carbon pricing scheme to incentivize companies and cities to reduce emissions. By integrating carbon credit trading, the TSE aims to further encourage companies to invest in renewable energy and low-carbon technologies.

Compliance Market Updates

ICE Launches CORSIA Futures Contracts(5)

On October 9th, 2023, the Intercontinental Exchange ("ICE") launched a new futures contract for CORSIA Eligible Emissions Units ("EEUs"), a physically deliverable monthly contract for offsets issued by eligible standards. The futures contracts will be available during CORSIA's First Phase and includes contracts for December delivery each year from 2024 to 2027. ICE's futures contracts will initially only support CORSIA-eligible carbon offsets issued by the American Carbon Registry, but the ICE aims to eventually include carbon offsets issued by Verra and Gold Standard subject to the International Civil Aviation Organization's approval.

WTO in the Process of Developing an Initial Framework for Global Carbon Pricing Measure(4)

The World Trade Organization ("WTO") has reiterated that it is in the early stages of developing a global carbon pricing framework to address the fragmented nature of global carbon pricing policies. There are currently ~70 national and subnational schemes that exist globally, making it difficult for businesses to navigate international trade. The framework would also ensure that plans to tax imports based on their carbon emissions do not unfairly penalize developing countries. WTO's Director General has said that a global carbon price is important to allow developing countries to continue to compete as Europe launches imports taxes based on the CO2 emissions of certain goods as some countries do not have the tools to determine the carbon price of their exports.

RGGI Market: RGAs Surpass All-Time High(4)

RGGI allowances ("RGAs") reached all-time highs during the last week of October, settling at $14.75 - only $0.01 above the previous record. The uptick in pricing is largely tied to the upcoming program review and scoping plan moving closer to reality. One of the drivers for the price spike is New York's announcement of substantial investments in renewable energy. New York state is the largest participant in the RGGI program, and the effects of the investments could be important for delivering the renewable energy sources needed to fulfil the ambitions of the RGGI program review.

WCI Market: CCAs Soar to New Record High(4)

California Carbon Allowances ("CCA") reached all-time settled highs of $37.55 for the December 23 contract on the back of California Air Resources Board ("CARB") announcing that it will present a scoping scenario in mid-November. CARB had previously indicated that it was exploring cuts to the cap of 40% to 55% and market sentiment is clearly bullish.

  1. Carbon Herald
  2. Rubicon Carbon
  3. The White House
  4. Carbon Pulse
  5. Quantum Commodity Intelligence

ESG & Carbon Advisory

As part of TD Securities' ESG Solutions Group, the Carbon Advisory team provides comprehensive ESG and capital markets solutions for corporates and carbon market participants.

Carbon Markets Trading

TD Securities' Energy Trading platform provides solutions for compliance / voluntary carbon and environmental commodity markets.

For more information and to receive our monthly Carbon Monthly Series, contact Andrew Hall on our ESG Solutions – Carbon Advisory Team Team

The views or opinions expressed herein represent the personal views of the writer and do not necessarily reflect the views of TD Securities or its affiliates.

This material is intended to provide commentary on the market for commodities discussed herein.

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Portrait of Andrew Hall

Andrew Hall
Managing Director, Carbon Markets Advisory, ESG Solutions, TD Securities

Portrait of Andrew Hall

Andrew Hall
Managing Director, Carbon Markets Advisory, ESG Solutions, TD Securities

Portrait of Andrew Hall

Andrew Hall
Managing Director, Carbon Markets Advisory, ESG Solutions, TD Securities

Andrew joined the ESG Solutions team as a Managing Director in July 2022. Based in Calgary, he has over 15 years of experience in environmental commodities, helping build out successful businesses within the financial services and energy sectors. Andrew joined TD from the TMX Group where he was the Director of Sustainable Finance, responsible for ESG and carbon markets. Prior to this, he built and ran the North American carbon and environmental commodities trading business at Capital Power.

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