Environmental Credit Hedging

Whether you own environmental credits and/or need to buy them, POWERHOUSE can help you hedge your price risk.

A lot has changed since the first exchange traded environmental markets were introduced in the 2000’s. Regional and federal policies have created new markets addressing renewable fuels, carbon and pollutants. With these new policies, buyers and sellers of energy are encountering new opportunities and risks.

The landscape for environmental credit hedging is complex. There are multiple exchanges that trade futures contracts. For example, RECs, LCFS, RINS, CCA and RGGIs futures are offered on 3 different exchanges. To make it more complicated, some futures contracts have financial settlements where others are physically delivered. There are also the over-the-counter markets.  

Contracts are still being added to meet the growing needs of the marketplace. Because many of these contracts are new, there may not be bids or offers showing on a screen. POWERHOUSE can help find bids or offers for your hedging needs.

POWERHOUSE can help structure and execute a hedging program that matches your needs.  Here are some common issues we can help with:

  • How do I hedge my environmental credit risk? 
  • Can you help me find markets for environmental futures markets?
  • What is the difference between contracts offered by the CME, ICE and Nodal Exchange? 
  • I want to get rid of counterparty risk when selling my physical credits.
  • I need customized contract sizes and trading credit.
  • I need a carbon offset for my fuel.
  • I am a producer of renewable fuels and need to hedge prices in future months.

When you work with POWERHOUSE you have access to all trading venues: Nodal, ICE, CME and OTC. We can help you make the most informed decisions when it comes to your environmental credit hedging.

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