Xpansiv, the global marketplace for ESG commodities, announced extraordinary progress in 2021, including robust growth across its exchanges and the successful launch of a digital platform for valuing commodities based on critical ESG data. Starting with natural gas, this comprehensive platform incorporates factors that include methane emissions and water usage—registered using independently verified source data—to create market incentives for sustainable production.
“Last year Xpansiv experienced phenomenal growth in our markets, data service, and technology businesses,” said John Melby, Xpansiv President and COO. “The CBL GEO became the first widely accepted voluntary carbon benchmark, we expanded our ESG commodity ecosystem with key acquisitions, and we launched a landmark Digital Fuels Program. We’re thrilled to continue to expand our presence as the global nexus for ESG commodities where data becomes proof, and intentions become actions.”
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“2021 was the year Xpansiv brought to market its extensible platform to value commodities based on data-driven ESG performance”
Voluntary Carbon Market Trading Volume Up 288%
Total carbon-offset volume transacted on Xpansiv exchange CBL exceeded 121.5M mtCO2e (tons) in 2021, up 288% from 2020 levels. More than 150 market participants—including corporate sustainability managers, project developers, trading firms, banks, and brokers—were active in CBL’s carbon market, an increase of 131% on the year.
A key development in the growth and evolution of the market was the uptake of CBL’s Global Emissions Offset™ (GEO®) and Nature-Based Global Emissions Offset™ (N-GEO™) spot contracts—the first benchmark instruments for the voluntary carbon market (VCM). The contracts were quickly established as pricing benchmarks for the technology-based and nature-based VCM market segments they track, and more than 16 million tons of carbon were transacted through the instruments during 2021.
Beyond this evolutionary milestone, CME Group launched trading in CBL GEO and N-GEO futures contracts on March 1 and August 1, respectively. The futures contracts saw total volume transacted of more than 47.1M tons with an open interest record of 15.3M tons set Dec. 29. On Dec. 31, CBL delivered 5.9M credits to settle the December futures contracts.
CBL growth was fueled by a surge in voluntary carbon market activity driven by corporate net-zero and ESG programs. In 2021, the global VCM grew from approximately $300 million in 2020 to more than $1 billion, based on the latest figures from Ecosystem Marketplace, which indicated that CBL’s market share grew from 17% in 2020 to 36% based on volume, and more than 41% based on notional value.
Xpansiv Launches Digital Natural Gas and Methane Performance Certificates
As part of its new Digital Fuels Program, Xpansiv developed and launched standardized digital assets designed to enable markets to value natural gas produced with measurable ESG attributes:
- Digital Natural Gas (DNG™) collects and records empirical data associated with individual MMBtus of natural gas production, capturing and verifying provenance and other ESG attributes, including third-party certifications from TrustWell and Equitable Origin.
- Methane Performance Certificates (MPC™) register methane-emissions intensities based on independently validated data taken directly from continuous monitoring at well pads and production facilities. S&P Global Platts assesses an MPC price daily.
- Market response has been rapid with six contracted producers in Canada and the US onboarding production data onto the Xpansiv DF Registry. The first MPC transaction occurred in October, and by year end more than 2,000 contracts representing 5 million MPCs traded. Currently, approximately 1 billion cubic feet (Bcf)/day of continuous natural gas production data is being uploaded to the Xpansiv platform through data ingestion partner Validere. Additional producers, traders, and buyers are in the process of contracting to onboard to the registry.
- Starting with August 2021 production, Xpansiv began registering, transferring, and retiring DNG with Equitable Origin EO100 certification and Clearstone Engineering ClearCalc methane emissions intensity attributes to facilitate multiple physical digital natural gas transactions. The transactions involved several counterparties, and the digital assets are settling each month across the Xpansiv DF Registry.
Xpansiv will continue to evolve and expand the program in 2022 with the addition of a wide range of new partners and stakeholders. Project Canary is joining Xpansiv’s Digital Fuels Program, providing Trustwell certifications and continuous methane monitoring data to the responsibly sourced natural gas market.
“2021 was the year Xpansiv brought to market its extensible platform to value commodities based on data-driven ESG performance,” said Xpansiv CEO Joe Madden. “Products and price signals that value ESG performance provide the foundation necessary to support market transformation.”
XSignals Sets Market Data Standard, Forges Platts Alliance to Build Transparency
2021 marked the first full year of the Xpansiv XSignals market-data business, built to deliver high-quality, exchange-derived data previously unavailable for the VCM and ESG commodity markets. XSignals provides unprecedented benefits for traders and risk and compliance teams. The year culminated in a groundbreaking partnership forged with S&P Global Platts, enabling the creation of new benchmarks that bring increased transparency, rigor, and integrity to the pricing of VCM assets, providing the market with greater confidence in a period of rapid transition. XSignals end-of-day prices were rapidly adopted by leading price-reporting agencies and carbon market news outlets, and subscriptions grew by 300% year over year along with a doubling of average sales per customer.
REC Trading Up 28% with Sharp Growth in Solar Instruments
CBL renewable energy certificate (REC) volumes rose 28% to 2,426 GWh during the year, driven by broader market participation and a sharp uptick in solar REC transactions facilitated, in part, by the acquisition of SRECTrade in November. Solar transactions on CBL increased 51% year over year to 315 GWh in 2021. The number of companies active in CBL’s REC market also grew from 73 to 88, enhancing price discovery and liquidity formation on the exchange.
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H2OX Water Transactions Up 24%, Membership Breaks 1,000 Mark
Xpansiv market H2OX is the leading spot exchange for trading water allocations and rights in Australia. Total water allocation sales in 2021 increased to 248 gigalitres (GL), a year-over-year increase of 24% from the 200 GL transacted in 2020, with 146 new participants registered for a total of 1,113—an increase of 15% for the year.
Favorable weather conditions increased water availability across the water market, driving increased water demand from irrigators to supply a bumper summer cropping program. Water prices responded to more favorable conditions with the volume weighted price for 2021 falling to $114ML from $333ML in 2020, increasing the number of market participants as lower value irrigated commodities became financially viable once again.
CSO Electronic Platform Volumes Increase
OTX, acquired by Xpansiv in March, is a leading market-access provider in the compulsory stockholdings obligations (CSO) market, rapidly expanding into renewable fuels and renewable fuel certificates. Total CSO volumes reserved via deals concluded in 2021 were 18.2 million tonnes per month spread over OTX’s trade advisory and electronic platform. Trade volumes fell 16.5% year over year driven by a decrease in CSO mandates across Europe from contracting fuel consumption during the COVID-19 pandemic, as well as regulatory changes in the United Kingdom. The May 2021 launch of a new version of the OTX electronic platform drove its share of total CSO platform volume to approximately 45%—a significant increase over previous levels.
EMA Portfolio Management System Processes More than One Billion Credits
Xpansiv’s portfolio management system, EMA, enables users to transact and manage multi-asset renewable energy and carbon portfolios across 11 registries from a single screen. In 2021, more than 1 billion credits and 4 million transactions were processed through EMA. The American Carbon Registry (ACR) was also integrated into EMA, expanding the number of registries available through the platform, and providing seamless integration with CBL for trading the GEO, N-GEO, and recently launched C-GEO contracts. Plans for 2022 include registry integrations with additional carbon and renewable registries. Additional functionality in EMA—including expanding features in the recently launched EMA Portal, which provides access to CBL prices, user guides, and alerts, as well as a suite of APIs—will also be released in 2022.
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