Emissions trading is a market-based mechanism for reducing or offsetting carbon emissions. The Australian Government has enacted a carbon pricing mechanism (CPM) from 1 July 2012. Although initially a fixed price, the Carbon Units will move to a flexible price structure in 2015. ASX is well placed to provide forward price discovery through the listing of futures contracts over carbon units.
ASX carbon unit futures and options will, if listed, provide a robust mechanism for companies that have an interest in or exposure to the carbon price and proposed ETS to manage their forward price and counterparty credit exposures.