FIA responds to CFTC guidance on the listing of voluntary carbon credit derivatives

16 February 2024

FIA commends the US Commodity Futures Trading Commission for its efforts to strengthen the integrity of voluntary carbon markets.

FIA generally supports the CFTC proposed guidance, which was published for public comment in December 2023. FIA views this guidance as a good faith attempt to promote more reliable voluntary carbon markets.

FIA understands from members that the primary challenges with voluntary carbon markets is not with the derivatives markets, but rather with the underlying voluntary carbon credits, specifically the lack of consistency in methodologies employed by third-party validators and quality of the credits. FIA welcomes the efforts of private sector-led initiatives that seek to increase the standardization and integrity of underlying voluntary carbon credits.

If the Commission views the proposed guidance as establishing additional requirements for exchanges that list voluntary carbon credit derivatives to implement, FIA asks that the CFTC engage in a formal Notice of Proposed Rulemaking (NPRM), which would provide even further transparency and clarity to market participants - both exchanges and commercial firms.

FIA encourages the Commission to continue coordinating with US and global regulators, standard setting bodies and, where practical, serve as a resource to states in the US that consider policies that may impact Commission regulated markets.

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