CIX launches global carbon marketplace

A digital platform that allows businesses to buy and sell carbon credits was launched yesterday by Singapore-based carbon exchange and marketplace Climate Impact X (CIX).

Called Project Marketplace, the platform will allow firms to discover, compare and purchase carbon credits from various projects around the world.

For a start, the marketplace will mainly feature carbon credits from nature-based solutions, such as forest conservation efforts. Other types of projects, such as those that use technology to suck up carbon dioxide (CO2) from the atmosphere, will be listed in the second half of this year.

As forests can take in planet-warming CO2 from the air through photosynthesis, every unit of CO2 absorbed by a forest can be sold as a credit.

There are currently about 10 to 15 such projects on the platform, including the Tambopata-Bahuaja Biodiversity Reserve located in the Peruvian Amazon.

The agroforestry project, which spans an area roughly the size of Los Angeles, entails the restoration of degraded areas there. Help is also given to local farmers to help them transition to sustainable cocoa production, reducing their need to cut down trees in the area.

CIX chief executive Mikkel Larsen said credits from nature-based solutions typically range from US$12 (S$16.35) to US$17 per credit.

He said he expects those listed on Project Marketplace will be "on the higher end", although the price will ultimately depend on the supplier.

The global trade in carbon credits essentially entails treating carbon as a commodity.

Each carbon credit represents one tonne of emissions, so buyers of the credits can offset this amount from their total emissions.

CO2, produced from human activity like burning fossil fuels and deforestation, is the main greenhouse gas driving climate change.

Companies or countries that find it hard to shrink their carbon footprint in the short term can purchase carbon credits - essentially paying someone else to reduce emissions on their behalf.

CIX, which was jointly established last year by DBS Bank, Singapore Exchange, Standard Chartered and Temasek to facilitate the trade of carbon credits, said its marketplace will enable businesses of all sizes to participate in the voluntary carbon market.

The platform can also be used to "retire" the credits so they are never to be traded or swapped again, to ensure carbon savings are not double-counted.

The launch of the marketplace comes as the Government announced last month that large emitters in Singapore that have to pay a carbon tax can, from 2024, buy international carbon credits to offset up to 5 per cent of taxable emissions.

Mr Larsen said creating marketplaces defined by transparency and integrity is of utmost importance for a rapidly evolving landscape like the voluntary carbon market, especially during periods of uncertainty.

"Responsible corporates are looking for assurance that the credits they buy will deliver tangible, lasting climate impact... Our aim is to engender greater confidence amongst buyers and sellers of carbon credits," said Mr Larsen.

"To achieve that goal, we focus on curating quality credits and offering credible data, insights and practical guidance to our wider community."

Project Marketplace will feature third-party ratings, supplemented with satellite monitoring technology data, of the various carbon projects listed on it.

Sylvera, a firm that provides data on nature-based offset projects, will provide information such as the permanence of the carbon removal, co-benefits of nature-based projects and risk.