New Business Relationship will facilitate CTX launch in the California Cap-and-Trade Program

Carbon Trade Exchange (CTX), a global leader in environmental commodity markets, and the Minneapolis Grain Exchange, Inc. (MGEX), a Designated Contract Market and Derivatives Clearing Organization recognized by the U.S. Commodity Futures Trading Commission, have today announced the establishment of a new business relationship.

This exciting new partnership will facilitate the launch of CTX in the California Cap-and-Trade Program, with MGEX providing support and services for a spot market exchange trading Allowances and Offsets in the state-based program.

The California Cap-and-Trade Program is designed to limit greenhouse gas emissions by establishing an annual cap on carbon emissions. As the Program continues to expand by linking to other programs such as the Québec Cap and Trade System, and introducing additional covered entities such as transport fuels, the need for an open and transparent exchange is all the more important.

CTX Chief Operating Officer and President of CTX USA Nathan Rockliff said, “This partnership will enable CTX to provide a simple, secure and transparent spot exchange service for U.S. carbon market participants, enabling businesses to meet their compliance obligations in an efficient and cost-effective way. We look forward to working with MGEX to deliver the infrastructure required to boost market liquidity and growth.”

“It is only natural that MGEX, with its long history in the agricultural markets, would seize upon the opportunity to participate in environmental markets,” said Mark G. Bagan, President and CEO, MGEX.  “MGEX is looking forward to the opportunity to assist a global leader in environmental commodities and to provide innovative trading solutions for United States carbon market participants.”

Once approved by the California Air Resources Board (ARB), CTX will be the first exchange to offer an automated, fully collateralized, and settled intra-day spot trading venue for products in the California Cap-and-Trade Program. The exchange will electronically connect with Wells Fargo’s system, ensuring the safe, secure and easy management of participant funds and will enable same-day delivery of both Allowances and Offsets within the ARB registry, subject to opening an account.