The NACX is Canada's only exchange focused on facilitating spot market trading of GHG emission offsets and other environmental compliance units. Canada's emission trading and environmental compliance market is in its infancy, with only Alberta having an active regulated program for developing and trading of verified emission offsets and Quebec following with its Regulation Respecting Cap-and-Trade System for Greenhouse Gas Emission Allowances, coming into effect January 1, 2012. The Government of Canada has enacted the Renewable Fuels Regulations to mandate the use of at least 5% renewable fuel in gasoline and 2% in diesel and heating fuel blends, which has generated a market for Renewable Fuel Compliance Units. The NACX has been established in response to the need to provide an efficient and transparent spot market for trading such environmental compliance units and emission offsets. Tell Me More
What Are Offsets
An "Offset" or "Carbon Credit" represents a verified reduction in greenhouse gas emissions (equivalent to one tonne of CO2 equivalent, or CO2e per offset). The Offsets are generated by an activity or project and can be used to cancel out or "Offset" emissions from another source. A purchaser of offsets is essentially paying another party to make emission reductions on their behalf. The Offsets are sold to buyers who can either apply the Offsets to their current emissions or "bank" them for future use. Once the Offset is used, it needs to be retired to ensure that the benefit of the reductions is not counted twice.
Registration Of Offsets
The NACX requires that all Alberta SGER Offsets posted for sale on the exchange are registered and serialized on the Alberta Emissions Offset Registry prior to posting so that they can be tracked and transferred as part of a transaction.
Once an offset is sold, the transfer and the name of the new owner will be registered on the registry. If the offset is to be submitted to Alberta Environment for emission reduction compliance, the buyer may request that the offsets be retired (cancelled) so that it can never be used again. The NACX will be linked to the Alberta Emission Offset Registry to assist in facilitating the registration of offset transactions and with other applicable registries as they are available.