Carbonplace and Climate Impact X (CIX) have joined forces on a pilot strategy to lower entry barriers for companies seeking to buy, compare and retire carbon credits on the voluntary carbon market.
The aim is to provide businesses of all sizes the chance to reduce carbon emissions to reach net zero targets and improve efficiency through voluntary purchasing of carbon credits.
Both parties hope the project will enable the commercial sector to develop climate strategies while buying and trading carbon credits to fund large-scale emissions removals or reductions that would not otherwise be possible.
With global demand for voluntary carbon credits expected to increase fifteenfold by 2030 and a hundredfold before 2050, carbon markets could become an important driver of the shift to a low-carbon economy.
The pilot will aim to establish the technical, legal, and operational framework for executing carbon credit transactions via CIX’s platform – Project Marketplace – with Carbonplace performing all settlements.
Carbonplace is a settlement platform that aims to reliable and scalable trading of certified carbon credits.
It was launched last year and expected to be fully operational by the end of 2022.
The fintech is being developed by multiple banking giants including BNP Paribas, CIBC, Itaú Unibanco, National Australia Bank, NatWest Group, Standard Chartered, and UBS.
CIX is a joint venture with DBS Bank, Singapore Exchange, Standard Chartered and Temasek.
It enables the purchase of high-quality carbon credits directly from specific projects, and uses satellite monitoring, machine learning, and blockchains with a focus on benefitting bioversity and local communities.
Mikkel Larsen, CIX chief executive, told City A.M.: “We expect the voluntary carbon market to grow significantly in the years to come as it becomes increasingly apparent that carbon credits are one part of the solution to tackling the climate crisis.”
Robert Begbie, chief executive of NatWest Markets, added: “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.”