The Montréal Climate Exchange (MCeX) announced today that it plans to launch trading of futures contracts on Canada carbon dioxide equivalent units on May 30.

The announcement comes days after the federal government released the details of its climate change plans, which include a national carbon emissions trading scheme.

“MCeX is moving quickly to launch the first exchange-traded carbon futures contract in Canada,” said Luc Bertrand, president and CEO of MX and chair of MCeX. “We are enthusiastic about creating this new derivatives market and about the launch of trading.”

MCeX is a joint venture of the Montréal Exchange (MX) and the Chicago Climate Exchange (CCX).

The plan was announced in July of 2007 and the launch date was set after federal government also announced its greenhouse gas emissions regulations, including targets for intensity-based Canadian emissions reductions and offsets program terms.

In October 2007, MX filed an application with the Autorité des marchés financiers (AMF) requesting approval for trading on the MCeX platform, SOLA(R). The company said it is still awaiting approval from the AMF but that a decision is expected soon.

In the MX application, the exchange says it will offer a price discovery mechanism to measure the cost of a tonne of carbon and a method of managing risk associated with price fluctuations using carbon futures contracts.

MX said it aims to operate a transparent, secure and liquid market in order to earn the confidence of traders, investors and market participants. MX plans to settle and guarantee contracts through its clearing house, the Canadian Derivatives Clearing Corporation, which is AA rated by Standard and Poor’s.

MX cites World Bank estimates that the world market for carbon amounts to about $100 billion. Trading activity on public carbon markets has grown in recent years to reach US$30 billion in 2006, according to the exchange.

“The demand for environmental derivatives continues to grow worldwide and the time is right to build a critical mass of trading activity in Canada,” said Richard Sandor, chairman and founder of the Chicago Climate Exchange.