Congress moves to block carbon credit futures trading
S.J.Res. 9 — A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Commodity Futures Trading Commission relating to "Commission Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts". · Filed by John Kennedy (R-LA) · 1 cosponsor · Introduced Jan 30, 2025 · Referred to committee
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What it does
This resolution disapproves a CFTC guidance document that would allow trading of voluntary carbon credit derivatives on U.S. futures exchanges. If passed, it would block the CFTC from implementing that guidance, preventing financial markets from offering these carbon-credit-linked financial products.
Why we flagged it
This is a standard CRA disapproval resolution under 5 U.S.C. § 801 et seq., which allows Congress to veto agency rules within 60 legislative days. It does exactly one thing: nullify a specific CFTC guidance document. The mechanism is procedural and transparent.
What the text implies
- Disapproving this guidance does not prevent the CFTC from reissuing similar guidance in the future or from approving individual carbon derivative contracts through case-by-case review, so the practical effect may be temporary delay rather than permanent prohibition.
- The resolution targets voluntary carbon credits specifically, not compliance-based (regulatory) carbon credits, leaving ambiguity about whether other carbon-linked derivatives could still be listed.
The full analysis lists 3 implications of this text.
Who stands to gain
commodity trading firms and derivatives exchanges (blocked from new product revenue); energy and industrial companies (blocked from carbon-credit hedging tools)