Key carbon market players develop a pilot to enable reliable, secure, and scalable trading of carbon credits
Carbonplace, the new carbon credit settlement platform, and global carbon marketplace and exchange, Climate Impact X (CIX), have teamed up on a pilot to lower entry barriers for organizations seeking high-quality carbon credits on the voluntary carbon market while delivering a seamless experience for customers to discover, compare, buy, and retire credits.
With global demand for voluntary carbon credits expected to increase fifteenfold by 2030 and a hundredfold before 2050, carbon markets will become an important driver of the shift to a low-carbon economy. This pilot aims to transform the voluntary carbon market by building in the accessibility, trust, and transparency needed to grow at scale and maximize climate impact.
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The pilot will establish the technical, legal, and operational framework for executing carbon credit transactions via CIX’s platform, “Project Marketplace”, a new digital platform for businesses and carbon project suppliers launched last week, with Carbonplace performing all settlements. It will enable many new customers – including corporations and financial institutions of all sizes – to progress their climate strategies, and buy and trade carbon credits to fund large-scale emissions removals or reductions that would not otherwise be possible.
The collaboration joins the strengths of the two new, high-profile carbon market participants. Carbonplace’s wide client base, unique settlement technology, wallet service to record and store voluntary carbon credits, and the high standards set by the regulatory environment for banks will be combined with CIX’s curated marketplace of quality-assured credits, giving existing bank customers scaled access to the carbon market. The resulting end-to-end solution will reduce complexity and increase access, trust, and transparency.
CIX, a joint venture with DBS Bank, Singapore Exchange, Standard Chartered and Temasek, enables the purchase of high-quality carbon credits directly from specific projects. Using satellite monitoring and machine learning, CIX ensures transparency, integrity, and quality of carbon credits, ensuring projects are assessed for carbon sequestration potential and benefits to biodiversity and local communities.
Carbonplace is a settlement platform that will provide a record of ownership and enable reliable, secure, and scalable trading of certified carbon credits. Launched last year and expected to be fully operational by the end of 2022, the fintech is being developed by banking giants BNP Paribas, CIBC, Itaú Unibanco, National Australia Bank, NatWest Group, Standard Chartered, and UBS. Only carbon credits verified according to internationally-recognized standards will be processed on its platform.
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Mikkel Larsen, CEO of CIX, said: “Voluntary carbon credits provide a robust, market-based approach to financing solutions for climate mitigation. However, the rate of finance is still very low compared to what is needed to keep global warming under a 2 degrees Celsius pathway by 2030. The collaboration between Carbonplace and CIX, through Project Marketplace, brings together easy access to curated, quality credits and a settlement system underpinned by transparency and integrity. It is precisely the type of accelerator we need for scaling up the voluntary carbon market.”
Robert Begbie, CEO of NatWest Markets, said: “Collaborating with CIX has the opportunity to transform the voluntary carbon credit market. Through Carbonplace, we can drive transparent and secure trading, provide access to global distribution channels, and, due to the highly regulated standards of the banking industry, remove the need for multiple intermediaries, simplifying the process for carbon credit sellers and helping buyers to trust the process more.”
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