Xpansiv’s Market Shake-Up: Spot GEO Skyrockets by 52% while N-GEO Futures Soar by 40%

Xpansiv's CBL Releases Comprehensive Report on Carbon Markets, Highlights Dominance of Maryland and New Jersey in Renewable Energy Credits Trading

Xpansiv’s CBL, a leading provider of carbon markets information, has released an update on the latest developments in emissions, renewable energy credits (RECs), and compliance markets. The report offers a comprehensive overview of trading volumes, prices, and market movements across different regions and instruments.

In the renewable energy credits (RECs) trading space, Maryland and New Jersey have emerged as dominant players. Last week, there was a significant surge in spot and front-month CBL GEO futures contracts, with a 52% increase, surpassing the rise of the resurfacing CBL N-GEO at 40%. Both types of contracts have witnessed substantial growth in trading volume and prices, with N-GEO expected to regain its position in pricing the broader nature-based sector. However, the spot contract’s volume was traded over-the-counter (OTC) at higher prices. Notably, a large portion of CBL VCM’s volume was traded through its GEO benchmark contracts, with about 80% of the 456,239-ton volume being traded, including 207,863 tons via the N-GEO current and trailing vintage instruments.

The report also highlights several project-specific transactions. Indonesian AFOLU credits closed at $6.95, while 2018 Brazilian nature credits were valued at $3.00. Older vintage Brazilian nature and vintage 2001 Indian fuel-switching credits settled at a much lower price of $0.35. Additionally, Gold Standard announced that Rwanda has issued a Letter of Authorization for a cookstove project, marking the first recognition of credits issued by an independent standard with an Article 6 authorization.

CME Group’s CBL GEO emissions futures complex witnessed a 38% rally for both December GEO and N-GEO contracts. The total trading volume across CBL GEO futures exceeded 3 million tons, significantly higher than CBL N-GEO futures’ volume of over 1 million tons. In total, 4,461,000 tons were traded across futures, which is lower than the previous week’s volume of 9,897,000 tons.

Moving on to North American compliance carbon markets, CBL collaborates with environmental registries to facilitate the trading of voluntary and compliance REC contracts. These contracts represent carbon credits generated by opting for cleaner renewable sources instead of fossil fuels. The Xpansiv report highlights the performance of the compliance REC market with the following results:

Maryland: Approximately 12,000 2023 Maryland solar credits were exchanged, with a closing price of $58.20 after multiple trades at $58.10.

New Jersey: Active trading took place for both 2023 and 2024 vintage solar credits, with trades surpassing 1,000 credits at $209 and $222, respectively, before closing at $220.75 due to falling offers.

The recent Xpansiv report on environmental markets indicates a notable surge in spot and front-month CBL GEO futures and CBL N-GEO contracts. The increased trading volumes and prices for both types of contracts suggest potential growth in the broader nature-based sector. Despite some fluctuations, CME Group’s CBL GEO emissions futures experienced a significant rally, indicating sustained interest in emissions trading. The dominance of Maryland and New Jersey in renewable energy credits trading, along with other transactions, highlights the diverse landscape within carbon credit markets.

Matt Lyons

Matt Lyons

Matt Lyons is the founder of Forestry & Carbon. Matt has over 25 years as a forestry consultant and is invoilved in numerous carbon credit offset projects.

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