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Notice
Market Participants are advised that ASX intends to launch a suite of Environmental Futures products on the ASX 24 Market to support Australia and New Zealand’s energy transition and decarbonisation efforts. Environmental Futures will provide a transparent forward curve out to five years, sending important price signals for risk management and investment.
ASX plans to list three deliverable Environmental Futures contacts, subject to final internal and regulatory approvals and external readiness. The contracts are:
· Australian Carbon Credit Unit (ACCU) Futures;
· Large Generation Certificate (LGC) Futures; and
· New Zealand Unit (NZU) Futures.
Key Features
· Transparent forward curve – Environmental Futures may improve price and data transparency by creating a liquid forward curve out to 5 years that is readily tradable and based on transaction and/or bid-offer data.
· Standardised – Each futures contract is generic with one future equal to 1,000 tonnes of CO2 equivalent not released into the atmosphere.[1]
· Deliverable –Those holding positions at expiry will be required to either deliver or take delivery of underlying certificates or units with ASX facilitating end-to-end delivery to maintain anonymity throughout the trading lifecycle.
Timeline – subject to internal/external readiness and regulatory approval
The listing date for ACCU, LGC and NZU Futures is late July 2024. The go-live date will be confirmed via market notice in late June/early July following receipt of all relevant approvals.
Testing
The contracts will be available in the ASX CDE test environment from the 14th May – 15th July 2024. Trading and Clearing Participants are encouraged to test their access and set up prior to go-live.
Draft Contract Specifications
Specifications |
ACCU Futures |
LGC Futures |
NZU Futures |
ASX contract code |
CA |
CL |
CN |
Underlying |
Australian Carbon Credit Units, which represent one tonne of carbon dioxide equivalent (CO2) greenhouse gas that is not released into the atmosphere |
Large-scale Generation Certificates, which represent one megawatt hour (MWh) of renewable energy generation |
New Zealand Units (NZU’s), which represent one tonne of carbon dioxide equivalent (CO2) greenhouse gas that is not released into the atmosphere |
Contract unit |
1 Futures contract is equal to 1,000 underlying units (ACCU’s) |
1 Futures contract is equal to 1,000 underlying certificates (LGC’s) |
1 Futures contract is equal to 1,000 underlying units (NZU’s) |
Deliverable units |
All ACCU’s eligible for government surrender |
All LGC’s eligible for government surrender, with the exception of wood waste and applying the Vintage Rule[2] |
All NZU’s eligible for government surrender |
Contract months |
March, up to 5 years ahead (annual listing) with the first contract March 2025 |
January, up to 5 years ahead (annual listing) with the first contract January 2025 |
May, up to 5 years ahead (annual listing) with the first contract May 2025 |
Trading hours |
10:00am – 4:00pm AEST/AEDT |
10:00am – 4:00pm AEST/AEDT |
10:30am – 4:00pm NZST/NZDT |
Registry (for delivery) |
Australian National Registry of Emissions Units (ANREU) |
Renewable Energy Certificate (REC) registry |
New Zealand Emissions Trading Register (NZETR) |
Settlement method |
Deliverable. ACCU’s must be delivered into the ASX ANREU account by no later than 4:30pm (AEST/AEDT) on the second Business Day following the Final Trading Day |
Deliverable. LGC’s must be delivered into the ASX REC account by no later than 4:30pm (AEST/AEDT) on the second Business Day following the Final Trading Day |
Deliverable. NZU’s must be delivered into the ASX NZETR account by no later than 4:30pm (NZST/NZDT) on the second Business Day following the Final Trading Day |
Final Trading Day |
4th March or, if 4th March is not a Business Day, the next Business Day |
27th January or, if 27th January is not a Business Day, the next Business Day |
4th May or, if 4th May is not a Business Day, the next Business Day |
Settlement Day |
Three Business Days following the Final Trading Day |
Three Business Days following the Final Trading Day |
Three Business Days following the Final Trading Day |
Price quotation |
AUD $0.01 |
AUD $0.01 |
NZD $0.01 |
Blocks/EFP’s |
Yes (block minimum 25 lots) |
Yes (block minimum 25 lots) |
Yes (block minimum 25 lots) |
Trading fee |
AUD $50 per lot |
AUD $50 per lot |
NZD $50 per lot |
Bloomberg code |
AAOA Comdty |
LCAA Comdty |
UNSA Comdty |
Refinitiv code |
0#YCA |
0#YCQ |
0#NCN |
Delivery process and timings
Environmental Futures are deliverable into the ASX Clear (Futures) account maintained at the relevant registry. ASX Clear (Futures) will effect delivery with Clearing Participants acting on behalf of end clients. The delivery process occurs over a period of 3 – 4 days.
Clearing Participants are ultimately responsible for client open positions at the time of contract expiry. To be a party to delivery, Clearing Participants must maintain an account at the relevant registry. Clearing Participants that do not maintain an account at the registry must have appropriate processes and procedures in place to ensure close out of any open client positions prior to market close on the Final Trading Day and must provide an attestation to this effect (in a form prescribed by ASX Clear (Futures)).
Key delivery and settlement timings for ACCU’s and LGC’s
Day |
Time (AEST/AEDT) |
Details |
Final Trading Day |
12:00pm |
On market trading ceases |
|
12:00pm |
Clearing Participants may commence transfer of Certificates or Units to ASX registry account to cover short positions |
|
12:00pm – 5:00pm |
Special blocks (1 lot minimum) are available to close out open positions |
|
5:30pm |
Clearing Participants to notify ASX of delivery intentions |
Final Trading Day + 2 |
4:30pm |
Clearing Participants with short positions must ensure eligible Certificates or Units have been transferred to the nominated ASX account within the relevant registry |
|
5:00pm |
ASX Clearing Operations runs final reconciliation |
|
5:30pm |
ASX Clearing Operations sends invoice to Clearing Participants |
Final Trading Day + 3 |
10:30am |
Buyer payments to be made by 10:30am (via Austraclear) |
|
12:30pm |
ASX to transfer payment to sellers |
|
From 2:30pm |
ASX to commence transfer of Certificates or Units to buyers |
Key delivery and settlement timings for NZU’s
Day |
Time (NZST/NZDT) |
Details |
|
Final Trading Day |
12:00pm |
On market trading ceases |
|
|
12:00pm |
Clearing Participants may commence transfer of Certificates or Units to ASX registry account to cover short positions |
|
|
12:00pm – 5:00pm |
Special blocks (1 lot minimum) are available to close out open positions |
|
|
5:30pm |
Clearing Participants to notify ASX of delivery intentions |
|
Final Trading Day + 2 |
4:30pm |
Clearing Participants with short positions must ensure eligible Certificates or Units have been transferred to the nominated ASX account within the relevant registry |
|
|
5:00pm |
ASX Clearing Operations runs final reconciliation |
|
|
5:30pm |
ASX Clearing Operations sends invoice to Clearing Participants |
|
Final Trading Day + 3 |
10:30am |
Buyer payments to be made by 10:30am (via Swift) |
|
|
12:30pm |
ASX to transfer payment to sellers |
|
|
From 2:30pm |
ASX to commence transfer of Units to buyers |
|
[1] Or 1,000 MWh of renewable energy generation for LGC’s
[2] Only certificates created in the assessment year or earlier are accepted as per the Vintage Rule
What do I need to do by when?
Participants are encouraged to review the draft contract specifications and delivery process outlined above and test access to the new product(s) (where applicable).
Market Participants wanting to trade ASX Environmental Futures should be in contact with their Clearing Participant to ensure they are aware of the listing and intend to clear the new product(s) from go live. All Participants wanting to go to delivery should ensure they have a registry account set up prior to the first delivery in 2025.
Need more information?
Issued by
Monique Bell, Manager, Commodities
Contact information
Commodities@asx.com.au
or