Carbon trading solutions for a greener future

Carbon credits are tradable assets representing one ton of carbon dioxide resulting from climate mitigation activities that either avoid new carbon emissions or remove carbon from the atmosphere. To generate carbon credit, a company must register its climate mitigation project and reduction targets in a market mechanism platform. Once the climate change mitigation project is registered and implemented, it must be monitored and then verified by an independent third party to ensure it has produced the desired outcome. Once verified the carbon credits are issued by the market mechanism platform and are ready to be traded. At this point, an individual or company can purchase carbon credits to offset their own emissions. With the end goal of net-zero, carbon credits help reduce worldwide greenhouse gas emissions and slow global warming.

Carbon offsets are a mechanism that allows organizations to compensate for their greenhouse gas emissions. This is done by paying someone else to eliminate an equal amount of emissions on their behalf. In exchange for payment, the organization earns a "carbon credit" that verifies a certain amount of carbon has been removed from the atmosphere. Carbon offsets can take the form of planting trees, investing in renewable energy projects, or helping developing countries reduce their fossil fuel consumption. In theory, offsets make sense because carbon emissions are a global issue, and it doesn't matter where they are reduced.

After producers cut emissions as much as possible, offsets can help pay for the costs of low-carbon technologies or environmental restoration projects to ‘offset' emissions that can't be avoided.

Carbon trade refers to the practice of buying and selling credits by carbon market consultants that allow companies or other entities to emit a specific amount of carbon dioxide or other greenhouse gases. These carbon credits are authorized by governments to gradually reduce overall carbon emissions and mitigating their impact on climate change.

The trading of commodities and derivatives such as futures, options, and swaps involves substantial risk of loss and may not be suitable for all investors. Advisory services as well as the trading of futures and options is available through various subsidiaries of StoneX Group Inc. including but not limited to the FCM Division of StoneX Financial Inc. Public Disclosures for the FCM Division of StoneX Financial Inc. The trading of over-the-counter products or swaps is available through subsidiary StoneX Markets LLC to individuals or firms who qualify under CFTC rules as an eligible contract participant. Please click here for the full disclaimer.

Carbon pricing is established through an emissions trading system. This process involves firms purchasing allowances for each ton of greenhouse gases they emit, with the government limiting the supply of such permits. Businesses can trade these allowances, thus creating a market-driven price for emissions. Emissions trading programs can be designed to replicate the benefits of taxes through mechanisms such as price floors and revenue-raising measures like permit auctions.

Environmental commodities are financial instruments that represent the environmental benefits derived from activities that aim to reduce environmental impacts or promote sustainability. These commodities encompass a range of instruments, including carbon credits, emission allowances, renewable energy certificates, water conservation credits, and renewable natural gas certificates among others. They play a crucial role in the sustainable development agenda and contribute to the global efforts in combating climate change.

Depending on the specific environmental commodity and the market in which it is traded, they can either be traded over the counter in business-to-business basis or through exchange platforms in spot or future transactions. Our team has the expertise to assist you in accessing the markets and meeting your environmental commodities trading needs.