CME Group Inc. (CME) is moving forward with a carbon-trading effort targeting emissions markets in the U.S. and Europe, readying new products and pursuing exchange status for the long-gestating venture.

The Chicago-based exchange operator this week announced new European carbon contracts set to launch Monday on CME's ClearPort platform, later shifting to the Green Exchange, a fledgling carbon market aligned with CME's New York Mercantile Exchange unit.

The new contracts, intended to more closely match carbon products traded on European markets, represent the first moves by CME to develop the Green Exchange, also backed by the emissions brokerage Evolution Markets and a handful of Wall Street banks.

"This was something that market participants were looking for," said Evan Ard, a spokesman for Evolution Markets.

CME inherited its interest in the New York-based Green Exchange, first unveiled in December 2007, via the acquisition of Nymex last year.

But trading activity on the Green Exchange platform, initiated in March 2008, stalled as CME and Nymex worked through their merger. The bank backers, including Credit Suisse (CS), JPMorgan Chase & Co. (JPM) and Merrill Lynch, were sideswiped by the financial crisis, and Constellation Energy Group (CEG), another founding member, moved to sell some of its assets.

Meanwhile, the Chicago Climate Exchange, which dominates on-exchange emissions trading in Europe, has gathered volume in the U.S. This follows the development of the Regional Greenhouse Gas Initiative in the Northeast and the election of President Obama, a proponent of a cap-and-trade scheme for emissions - and a member of the board that provided initial funding for CCX.

Now the Green Exchange venture looks to be moving ahead, as CME works to secure exchange status with the Commodity Futures Trading Commission in the U.S. and the Financial Services Authority in the U.K.

"We're finally focused on it," said Leo Melamed, CME's chairman emeritus, in a recent interview. "We see great potential, and we're moving toward building on it."

As a new slate of products enters development, CME is talking to buy- and sell-side participants in Europe to sell additional equity stakes in the Green Exchange, according to Randy Warsager, vice president of marketing for Nymex.

Warsager said CME's position as a stronghold of U.S. derivatives trade gives it an edge against the Chicago Climate Exchange and other carbon-focused competitors in Europe, including platforms backed by NYSE Euronext (NYX), Nasdaq OMX Group Inc. (NDAQ) and Deutsche Boerse AG's (DBOEF) futures unit Eurex.

"With energy [markets] in particular, there are cross-margining and clearing efficiencies that will develop," Warsager said.

Gil Avidar, head of emissions sales for the Americas at Newedge Group, said CME's recent moves were encouraging, "but they're definitely coming from behind - the European Climate Exchange has attracted a lot of volume."

Avidar said Europe will remain the current focus for carbon investors, as algorithmic traders bring increased volume and open interest to the market and a national U.S. cap-and-trade program remains a few years off.

Brian Rice, principal of the Atrium Carbon Fund and a member of both the Green Exchange and the Chicago Climate Exchange, said it will take more than new contracts to convince him CME is really getting behind the Green Exchange.

"Until they do, it isn't really a fight," he said.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com