01.24.2023

ICE Launches Carbon-Neutral U.S. Electricity Futures Index

01.24.2023
ICE Launches Carbon-Neutral U.S. Electricity Futures Index

Intercontinental Exchange, Inc., a leading global provider of data, technology and market infrastructure, announced the launch of the first carbon-neutral U.S. electricity futures index. With the market focused on the build out of North American renewable generation and its impact on U.S. power prices, the ICE U.S. Carbon Neutral Power Index provides investors with a benchmark that contains exposure to the critical North American power markets.

“Electricity is the second largest energy component of the Consumer Price Index and is not directly included in any of the existing major commodity indices,” said Varun Pawar, Vice President, Head of ICE Data Indices. “This rules-based index developed by ICE with methodology licensed from Carbon Neutral Investment Company LLC (CNIC) has the ability to be a preferred financial instrument for investors who are looking for sustainable North American commodity exposure in their portfolios.”

The ICE U.S. Carbon Neutral Power Index consists of the prompt twelve months of ICE-listed electricity futures contracts from six major U.S. power pools as well as carbon allowance futures contracts designed to offset the emissions of the generation associated with these electricity futures contracts. With the utilization of the six major U.S. power pools, the ICE U.S. Carbon Neutral Power Index will be broadly representative of U.S. electricity consumption and price.

“We are proud to have licensed our methodology as part of the ICE U.S. Carbon Neutral Power Index,” said Donald R. Sinclair, Chairman of CNIC. “This index will assist us in developing financial instruments that provide investors exposure to exchange-traded electricity futures and carbon offsets, while having the ability to use the ICE U.S. Carbon Neutral Power Index as a benchmark.”

ICE’s global family of indices serves as the performance benchmark for more than $1.5 trillion in assets managed by investors around the globe. For more information about ICE’s Indices, please visit: https://www.theice.com/market-data/indices.

Source: ICE

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