Moscow Exchange and VTB agree to develop principles of carbon unit trading
On 3 June 2021, Moscow Exchange and VTB signed an agreement to work together to develop a carbon unit trading market.
The official signing ceremony, held at the XXIV St. Petersburg International Economic Forum (SPIEF 2021), was attended by Yury Denisov, CEO of Moscow Exchange, and Yury Soloviev, First Deputy President and Chairman of the Management Board of VTB Bank.
The aim of the agreement is to bring Moscow Exchange and VTB together to establish the regulatory framework and requirements for the sale of greenhouse gas emission credits, as well as green certificates for the reduction of Russia's carbon footprint. Legislative initiatives aimed at reducing atmospheric emissions are expected to be the driver of emissions trading. These might include carbon taxes and a centralised cap-and-trade or baseline-and-credit scheme designed to limit and reduce greenhouse gas emissions to protect against acute and short-term environmental threats. These measures are intended to give companies incentives to either purchase emission allowances or introduce emissions-reduction initiatives.
The agreement also aims to develop an on-exchange market for agricultural products, establish and promote commodity market benchmarks, as well as make exchange instruments more attractive and popular for agricultural producers, grain exporters and grain traders.
Yury Denisov, CEO of Moscow Exchange, said:
"VTB is one of our largest partners, which is active in all segments of the Russian on-exchange market and involved in the development of products and services for various categories of customers.
Strengthening the partnership will improve the efficiency of the commodity exchange market in Russia, offer new services and opportunities to agricultural producers and financial market participants, while the real sector of the Russian economy will benefit from greenhouse gas emission quotas trading instruments.
I am confident that the experience of Moscow Exchange and the expertise of our partners will form the basis for the successful implementation of this agreement."
Yury Soloviev, First Deputy President and Chairman of the Management Board of VTB:
"Together with Moscow Exchange, we plan to pioneer the introduction of innovative exchange instruments for the Russian market. We have already started trading Russia's first deliverable wheat futures, and now, in partnership with the exchange, we plan to start building a market for trading in carbon units. We see this area attracting more and more attention from market participants, with the ESG agenda and the minimisation of environmental risks becoming a priority for companies around the world and something that investors demand. We expect that the new instrument will be in demand in the Russian market."
Moscow Exchange Group operates Russia’s main trading platform for equities, bonds, derivative instruments, currencies, money market instruments and commodities. The Group includes the central securities depository (National Settlement Depository), and a clearing center (National Clearing Centre), performing the functions of central counterparty on the markets, which allows Moscow Exchange to offer its clients the full spectrum of trading and post-trading services.
VTB Bank, its subsidiaries and financial organizations (VTB Group) is an international financial group providing a wide range of financial and banking services in Russia, CIS, Western Europe, Asia and Africa. VTB Bank provides a full range of banking services through an extensive regional network. The Group's subsidiaries provide leasing, factoring and other financial services. VTB Group has an international network of over 20 banks and financial companies in more than 20 countries. As of 31 March 2021, VTB Group was the second largest financial group in Russia in terms of assets (RUR 18.6 trillion) and customer accounts (RUR 13.7 trillion). VTB's majority shareholder is the Russian Government, which holds 60.9% of voting shares.