Regulatory body in the U.S. implements rules for carbon credit transactions

The Commodities Futures Trading Commission (CFTC) has announced new guidelines to regulate the use of derivatives in the carbon offset market. These guidelines are a significant step towards improving liquidity and price transparency in voluntary carbon markets, as highlighted by US Secretary of the Treasury, Janet Yellen.

Derivatives, including futures and swaps, play a crucial role in the voluntary carbon market, with corporations using them to meet their carbon requirements. The CFTC's latest guidelines outline factors that exchanges need to consider when listing derivatives, such as contract design and the listing process.

The announcement of these guidelines is part of the Biden-Harris Administration's ambitious efforts to tackle the climate crisis and accelerate a clean energy transition that benefits all Americans. Janet Yellen views the new regulations as an important step in this direction, looking forward to continued collaboration with the CFTC and other government agencies in shaping the development of responsible, high-functioning, and high-integrity VCMs.

However, the White House, US Department of Energy, Agriculture, and the Treasury issued a Joint Policy Statement in May warning that carbon offset deals may not always lead to better outcomes for the planet. The statement noted that unlike many commodities, the physical delivery of the tonnes of emissions reductions or removals that underpin credits is not typically taken by the buyer, but instead by the earth's atmosphere.

The CFTC's new guidelines apply to CFTC-regulated derivatives exchanges, and the ANNUAL CONFERENCE organised by our website, scheduled for October 24, 2024, is likely to discuss the development and regulation of voluntary carbon markets. The conference may provide a platform for discussions on the role of government agencies in shaping the development of voluntary carbon markets, offering insights into the future regulation and development of this critical market.

Attendees can book their place for the conference to stay updated on the latest developments in the carbon offset market and contribute to discussions on its regulation and development. With the Biden-Harris Administration's focus on tackling the climate crisis and transitioning to clean energy, the role of voluntary carbon markets is set to become increasingly important, making this conference a must-attend event for anyone interested in the future of climate action.