The following frequently asked questions provide a guide to green attribute terminology and ICE’s green attribute products.
Green attributes are the cumulative environmental benefits of a specific commodity. A green attribute includes the emission characteristics, waste reduction, and overall environmental impact created through consumption. Green attributes can be bought and sold on their own or bundled in with the underlying physical product.
Green attributes are present in renewable energy and renewable fuels. Green attributes are a useful tool for an environmentally conscious consumer because they allow the consumer to gain the environmental benefits of the greener commodity without having to consume the physical product themselves. When consumers purchase green attributes, they acquire the rights to inherent environmental benefits of those products. They do this to lower their greenhouse gas emissions and overall environmental footprint. For example, a consumer can lower their environmental footprint from their natural gas consumption by purchasing the green attributes from a unit of renewable natural gas produced and sent into a pipeline network, while not consuming that exact unit of gas themselves. With the purchased green attribute, the consumer’s consumption of standard natural gas becomes green.
The Renewable Fuel Standard (RFS) is a nationwide program in the U.S. that sets renewable fuel blending standards for fuel producers. Obligated parties under the RFS must comply with the program by producing and blending the minimum percentage of renewable fuels into their transportation fuels, or by purchasing enough Renewable Identification Numbers (RINs) to equal their obligation. For more information, visit the EPA’s Renewable Fuel Standard overview.
Renewable Identification Numbers (RIN) are green attributes of renewable fuels. They are used as credits for compliance within the US Renewable Fuel Standard Program. RINs are created by producing different types of renewable fuels. They can be transferred between different entities within the EPA moderated transaction system (EMTS).
ICE lists RIN futures contracts for two distinct fuel blends. They are financially settled products tracking the market price of the RIN. For more information, visit the ICE Biodiesel Outright - D4 & D6 RINS (OPIS) Current Year Future contract details.
The Low Carbon Fuel Standard (LCFS) is a greenhouse gas reduction program focusing on the transportation sector in California. Each year, different fuel types are given carbon intensity (CI) scores. Fuel producers that are below their annual CI benchmark are awarded credits, while producers that are above the benchmark must procure credits to remain in compliance. Through this benchmark and crediting system, low-carbon fuels and other alternative transportation methods are incentivized. For more information, visit the California Air Resource Board’s Low Carbon Fuel Standard overview.
A Low Carbon Fuel Standard (LCFS) credit is used for compliance within the LCFS program in California. Fuel producers with CI scores above their specific benchmark must procure LCFS credits to cover their excess emissions. Credits can be transferred between entities within the LCFS Credit Banking and Transfer System (LRT‐CBTS).
ICE lists a LCFS futures contract for LCFS credits created from various processes and initiatives. It is a financially settled contract that tracks the market price of the LCFS credit. For more information, visit the ICE California Low Carbon Fuel Standard Credit (OPIS) Future contract details.
A renewable portfolio standard (RPS) is a government-mandated program whereby electricity retailers and other load-serving entities are required to source a specific percentage of the electricity that they sell to the end consumer, from renewable energy sources. Most RPS programs in the United States are organized at the state level, and each RPS is unique with regards to the types of electricity that are considered renewable and the percentages required for compliance each year. For more information, visit the EIA Renewable Energy Portfolio Standards.
A renewable energy certificate (REC) is the most common name given to green attributes in North America. A REC represents one MWh of renewable energy produced from an eligible resource technology which is generated onto an energy grid. A REC awards the buyer the green attribute of the electricity generation. RECs are used to ‘green’ a specific buyer’s electricity consumption whereby the buyer consumes grid electricity made up of various sources (natural gas, coal, nuclear, renewable) and covers the non-renewable elements of this consumption with an equivalent amount of RECs.
An ICE REC futures contract is a futures contract for renewable energy certificates issued by a specific state RPS program. ICE lists REC futures contracts from five different state RPS programs. These contracts are physically delivered products whereby contracts held to expiry result in the physical delivery of RECs within the REC registry used by the specific state. For more information, visit ICE Renewable Energy Certificates.
The Renewable Energy Directive (RED) is the European Union’s policy instrument to promote renewable sources in the energy production as well as in the transport sector. The latest update of the directive, known as RED II, sets the framework for 2021–2030 and gives a priority to advanced biofuels and electricity in transportation with specific targets and multipliers.
ICE lists first-generation, crop-based as well as second-generation, waste-based biodiesel futures. FAME (Fatty Acid Methyl Ester) and RME (Rapeseed Oil Methyl Ester) are first-generation biodiesels produced from plant oils and rapeseed oils respectively. UCOME (Used Cooking Oil Methyl Ester) is a second-generation biodiesel produced from waste cooking oil. These futures reference Argus price assessments.
Gordon Bennett, Managing Director ICE Utility Markets, examines the impact of the energy transition on various energy uses through the lens of a market operator and data provider.
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