IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets, today announced the first trade of the California Carbon Allowance forward contract. In addition to being the first trade of this cleared contract on ICE, it is the first ever exchange cleared trade based on California's new cap and trade program.
The transaction was for 100 contracts, representing 100,000 California Carbon Allowances, at a price of $17.00 per allowance. These terms were agreed to on August 10, 2011, between NRG Power Marketing LLC and Shell Energy North America (US), L.P. (Shell Energy) for this first trade.
"This forward contract is significant, not just because it's a first, but because it will help provide some liquidity to the nascent California carbon market. Added liquidity will enable entities across the state to utilize a methodical, measured approach in managing their emission reduction goals, schedule and associated costs," said Tom Ingwers, Shell Energy vice president environmental products.
The counterparties to the trade above confirmed their participation at the request of ICE.
ICE launched trading on OTC physical environmental forwards today: see full list of products.