ICVCM Welcomes CFTC Recognition of Core Carbon Principles in Derivatives Guidance

The Integrity Council for the Voluntary Carbon Market welcomed the US Commodity Futures Trading Commission's guidance on voluntary carbon credit derivatives, which identifies the ICVCM's Core Carbon Principles as industry-recognised standards for Designated Contract Markets. The CFTC guidance aligns with the broader US Carbon Market Principles published by the US Department of the Treasury.

The CFTC issued guidance for Designated Contract Markets on listing voluntary carbon credit derivatives, identifying transparency and liquidity as core characteristics. The guidance specifically cited the ICVCM's Core Carbon Principles as a key tool for DCMs to adhere to, marking an important regulatory endorsement for the CCP framework. The ICVCM noted that this follows the US Department of the Treasury's publication of Carbon Market Principles emphasising high-integrity credits in advancing domestic and global climate goals.

The CFTC endorsement is significant for the voluntary carbon market's integration into formal financial markets. By identifying the CCP framework as a reference standard for listed derivatives, the guidance encourages financial intermediaries to price and trade carbon credits against a recognised quality benchmark. This supports market liquidity and transparency while providing buyers with greater assurance about the credits underlying derivative instruments traded on regulated exchanges.

The ICVCM stated it looks forward to continued collaboration with the CFTC and other governmental bodies to ensure the voluntary carbon market contributes meaningfully to global climate efforts. The endorsements from US regulators follow similar moves by the UK government, which has committed to consulting on CCP endorsement, and Singapore's Monetary Authority, which is exploring how to align transition credits with the CCPs. For Indian carbon market participants, growing regulatory convergence around the CCP standard signals increasing importance of CCP alignment for cross-border credit trading.

Key figure — US CFTC identifies ICVCM Core Carbon Principles as industry-recognised standard for derivatives listings