Singapore-based carbon exchange Climate Impact X (CIX) has launched its Nasdaq-powered spot trading platform CIX Exchange, which allows users to efficiently discover market-driven prices, compare individual projects and trade standard contracts.
To address industry calls for greater transparency and price certainty, CIX said it has introduced the first daily on-exchange liquidity window in the voluntary carbon market with firm bids and offers.
The dedicated 30-minute pricing session pools all-day liquidity from Asia, Europe and Middle East to help sharpen benchmark prices and improve order depth for spot nature-based credits.
The first trades were executed by Chevron International Trading, CICC Commodity Trading, Engie Energy Marketing Singapore and Standard Chartered.
Other supporters that participated include Carbon Growth Partners, DBS Bank, Hana Securities, RWE Supply & Trading, South Pole, Viridios Capital and Vitol Asia.
CIX Exchange currently lists 34 single nature-based projects which have been verified by Verra and curated from around the world.
These projects support reducing emissions from deforestation and forest degradation, improved forest management, and afforestation, reforestation and revegetation. This includes the 11 projects that are eligible for delivery into Nature X.
The company also launched a new clearing and settlement service for privately negotiated transactions, CIX Clear, that it says will enhance the accessibility and scalability of carbon markets by reducing onboarding friction and counterparty risk when establishing bilateral trade relationships.
Mikkel Larsen, the company’s CEO, said, “The launch of our spot exchange completes the build of our core venues, which have been customised for the widest range of end-user, investor and intermediary needs.”
Singapore is trying to leverage its status as a business hub in Asia to be the main carbon trading platform in the region.
By winning enough liquidity from international carbon traders, it hopes to become a global price setter for carbon credits and lay the groundwork for an eventual futures market.
CIX, a joint venture among Singapore Exchange, state investor Temasek and banks DBS and Standard Chartered, said the initial price established for its physical carbon credits was $5.36 per tonne.
This is about four times that for a similar nature-based contract at CBL, the world’s leading carbon exchange.
Voluntary carbon trading is a system that directs financing to climate-related projects. In buying carbon credits — certificates that represent quantities of greenhouse gases kept out of the air or removed from it — companies can offset their own emissions. The credits come from projects around the world that protect and support nature.
©Markets Media Europe 2023
