Nodal Exchange To Launch First-Ever Washington Carbon Allowance And Washington Clean Fuels Program Futures In Collaboration With IncubEx

Nodal Exchange and IncubEx announced today the planned launch of Washington Carbon Allowance (WCA) Vintage Specific futures and Washington Clean Fuels Program (CFP) futures contracts.

The two first-of-their-kind listed contracts are scheduled for launch on August 11, 2023, pending regulatory review.

The Washington CFP futures contract physically delivers credits issued by the Washington Department of Ecology via the Washington Fuel Reporting System Credit Bank and Transfer System (WFRS-CBTS). Washington launched its Clean Fuel Standard on January 1, 2023, as the third state (after California and Oregon) to implement a market-based GHG emissions reduction program for transportation fuels, setting an emissions reduction target of 20% (based on 2017 levels) by 2034.

Relevant: Washington Raises $300 Million From New Cap-and-Invest Market

These new contracts will extend Nodal’s offering which currently includes the only physically-delivered renewable fuels contracts on California’s Low Carbon Fuel Standard and Oregon’s Clean Fuels Program.

The WCA Specific Vintage futures contract is also physically delivered and enables market participants to make or take delivery of specific vintages that meet their compliance needs under the Washington carbon “Cap-and-Invest” program. The new contracts expand on the pioneering Washington Carbon Allowance futures launched in December 2022 and WCA options contracts listed in January 2023 on Nodal Exchange. Since launch, more than 8,200 WCA futures and options (equal to 8.2 million WCAs) have traded on Nodal, with open interest rising to more than 3,500 lots.

The WCA Vintage Specific futures contracts join the slate of North American listed carbon products on Nodal Exchange including: California Carbon Allowance (CCA), California Carbon Allowance Vintage Specific, California Carbon Offset (CCO) futures, and Regional Greenhouse Gas Initiative (RGGI) futures and options.

Relevant: Washington State Is Looking To Start Selling Carbon Credits

“We’ve seen significant growth in the WCA market since launch, with increasing participant interest,” said Dan Scarbrough, President and COO at IncubEx. “Based on customer feedback, we believe these products nicely complement the current carbon and renewable fuel credit markets listed on Nodal Exchange and mark another step in the growth of the Washington state market-based solutions aimed at reducing greenhouse gas emissions and for the North American compliance carbon markets more broadly.”

“The new Washington contracts continue to illustrate the evolution of the North American environmental markets,” said Paul Cusenza, CEO of Nodal Exchange. “Nodal is proud to have built the broadest suite of exchange-listed environmental products and to add to it with these unique contracts.”

Read more: Washington State Passes Carbon Removal Funding In Capital Budget

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