Abaxx Technologies Inc. (OTCQX: ABXXF) has made a significant stride in the carbon trading market with the execution of the first carbon futures block trades on its newly launched Abaxx Commodity Futures Exchange and Clearinghouse. On October 30, 2024, Mercuria and HNK Alpha traded a total of 100 lots of carbon offset unit futures, marking a pivotal moment for this emerging market.
The trades consisted of two key transactions, the purchase of 50 lots of December 2024 CORSIA Phase 1 Carbon Offset Unit Futures at a price of USD $24.00 per tonne of CO2 equivalent (tCO2e) and a further 50 lots of December 2025 JREDD+ Carbon Offset Unit Futures at USD $17.75 per tCO2e.
These transactions are notable for their potential impact on carbon pricing and risk management within global carbon markets. The introduction of these centrally cleared, physically deliverable contracts aims to enhance price discovery and provide market participants with essential tools for managing their exposure to carbon emissions.
Alasdair Were, Head of Environmental Markets at Abaxx Exchange, expressed pride in Mercuria’s choice to utilize Abaxx’s Environmental Futures for risk management in carbon markets. He emphasized that these contracts were developed in collaboration with global market participants to meet commercial needs and foster liquidity in carbon trading. This collaboration is crucial as it aligns with broader efforts to facilitate the transition to a lower-carbon economy.
Abaxx’s carbon futures contracts were launched earlier in June 2024, as part of a suite that includes futures for liquefied natural gas (LNG). The exchange operates 14 hours a day, Monday through Friday, providing ample opportunities for trading and risk management.
The execution of these trades comes at a time when regulatory frameworks and market mechanisms are increasingly focusing on carbon emissions reduction. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and Jurisdictional Reducing Emissions from Deforestation and Forest Degradation (JREDD+) are significant initiatives that aim to create structured pathways for carbon offsetting.
As companies face mounting pressure to reduce their carbon footprints, the development of reliable price signals through futures contracts becomes essential. Abaxx’s initiative provides a platform where businesses can hedge against future price fluctuations in carbon credits, thereby supporting their sustainability goals.
Abaxx Technologies is committed to building smarter markets through enhanced financial technology and infrastructure. The execution of these initial trades is just the beginning; the company plans to expand its offerings further by introducing additional products such as nickel sulfate futures.
The collaboration with industry leaders and technology partners underscores Abaxx’s dedication to creating innovative solutions that meet the evolving demands of the commodities marketplace. As the energy transition accelerates, platforms like Abaxx Exchange will play a vital role in facilitating investment and participation in low-carbon initiatives.
The successful execution of block trades by Mercuria and HNK Alpha on the Abaxx Commodity Futures Exchange marks a significant milestone in the evolution of carbon markets. It reflects growing confidence among market participants in utilizing innovative trading solutions to navigate the complexities of emissions management while contributing to global decarbonization efforts.
