SINGAPORE – A new global carbon exchange and marketplace will be up and running later in the year to help firms go greener and boost efforts to establish Singapore as a carbon services and trading hub.<\/p>\n
Climate Impact X (CIX) – to be a joint venture funded by DBS bank, Temasek, Standard Chartered and the Singapore Exchange (SGX) – was announced on Thursday (May 20). More partners will be added as it is scaled up.<\/p>\n
Carbon trading essentially treats carbon as a commodity that can be bought and sold between less and more pollutive firms.<\/p>\n
Climate Impact X (CIX) will offer platforms and products that cater to the needs of different buyers and sellers of carbon credits.<\/p>\n
It will allow large-scale, high-quality carbon credits to be sold through standardised contracts in an exchange, catering primarily to multi-nationals and institutional investors.<\/p>\n
A broader spectrum of firms that want to participate in the voluntary carbon market will be accommodated as well with projects in a marketplace that can help them meet sustainability objectives.<\/p>\n
These could involve protecting and restoring natural ecosystems like forests, wetlands and mangroves.<\/p>\n
The platform will also leverage technology such as satellite monitoring, machine learning and blockchain to ensure that the carbon credits deliver a tangible environmental impact, the four partners said.<\/p>\n
Monetary Authority of Singapore (MAS) managing director Ravi Menon noted at the launch: “CIX is a promising solution to the problem we face today of fragmented carbon credit markets characterised by thin liquidity and credits of questionable quality.”<\/p>\n
He added that a robust carbon market can channel funds to emission reduction and removal projects that generate the credits.<\/p>\n
Carbon credits are tradeable certificates that represent the reduction, avoidance or removal of a certain amount of emissions from the atmosphere. Other firms can then buy these credits to offset their own hard-to-abate emissions.<\/p>\n
Mr Menon noted that the global demand for voluntary carbon credits is expected to grow 15-fold over the next 10 years to two billion tonnes in 2030.<\/p>\n
Mr Mikkel Larsen, CIX interim chief executive and DBS chief sustainability officer, said: “CIX will provide a solution for corporates to address unavoidable carbon emissions in the near term and propel the development of new carbon credit projects worldwide.<\/p>\n
“The carbon credits will also create impetus to address another grave risk of biodiversity loss and help serve local communities.”<\/p>\n
The CIX will be guided by an international advisory council, which is an independent body comprising non-governmental organisations, leading firms and project developers and academics.<\/p>\n
It will also work with global partners to align with leading standards for quality and integrity.<\/p>\n
DBS chief executive Piyush Gupta said: “It is becoming increasingly apparent that the world requires a carbon market of the highest international standards. As a leading global financial and trading hub, supported by strong regulatory frameworks, Singapore is well placed to lead such sustainability efforts.”<\/p>\n
Voluntary carbon markets like the CIX are necessary to accomplish a significant capital shift to markets to protect nature and enable a sustainable low-carbon transition, said Stanchart group chief executive Bill Winters.<\/p>\n
Temasek chief investment strategist Rohit Sipahimalani said: “We are pleased that the platform will help organisations to address their carbon footprints through both market and natural climate solutions.”<\/p>\n
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