Yesterday, on July 19, 2023, the CFTC held its second voluntary carbon markets convening, approximately a year following the initial voluntary carbon markets convening on June 2, 2022. The stated purpose of the meeting is to: "discuss [1] current trends and developments in the cash and derivatives markets for carbon credits; [2] public sector initiatives related to carbon markets; [3] recent private sector initiatives for high quality carbon credits; and [4] market participants' perspectives on how the CFTC can promote integrity for high quality carbon credit derivatives." As stated in the press release announcing the meeting, the "discussion may inform the Climate Risk Unit's recommendations for any new or amended guidance, interpretations, or policy statements related to the voluntary carbon markets, which is within the CFTC's authority under the Commodity Exchange Act."
This second voluntary carbon markets convening reflects the CFTC's increasing focus on the voluntary carbon market, especially carbon offsets. Indeed, only a month ago the CFTC had issued a call for whistleblowers to provide information on "potential fraud and manipulation" in the "voluntary carbon markets," particularly concerning "high-quality carbon credits, also known as carbon offsets." (https://insights.mintz.com/post/102ii3z/cftc-asserts-enforcement-authority-over-carbon-markets) This regulatory and enforcement initiative by the CFTC concerning the voluntary carbon markets is one of several efforts by the Biden Administration to enact its climate agenda.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
