CIX partners Carbonplace to lower entry barriers to voluntary carbon market

TEMASEK-BACKED carbon exchange Climate Impact X (CIX) has partnered with Carbonplace, a new carbon credit settlement platform developed by 7 banks, to lower the entry barriers for organisations seeking high-quality carbon credits on the voluntary carbon market.

They aim to achieve this by piloting a technical, legal and operational framework for executing carbon credit transactions on CIX's recently-launched digital platform, Project Marketplace, they said in a statement on Friday (Mar 25).

Carbonplace - started by BNP Paribas, CIBC, Itau Unibanco, National Australia Bank, NatWest Group, Standard Chartered and UBS - will perform the settlements behind the transactions.

The banks had conceptualised the platform to only process carbon credits verified according to internationally-recognised standards.

The platform, which was launched last year and expected to be fully operational by the end of this year, will also be made to be able to provide a record of ownership and enables reliable, secure, and scalable trading of certified carbon credits.

The latest collaboration will address existing issues with access, trust and transparency, CIX and Carbonplace said. With that, many new customers, including corporations and financial institutions of all sizes, can buy and trade the carbon credits needed to fund large-scale emissions removals or reductions that would not otherwise be possible, they added.

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Commenting on the pilot's significance, CIX chief executive officer (CEO) Mikkel Larsen said the rate of finance is currently "still very slow" compared to what is needed to keep global warming under a 2 degree Celsius pathway by 2030.

With Carbonplace's settlement system, which he said is underpinned by transparency and integrity, the collaboration is "precisely the type of accelerator we need for scaling up the voluntary carbon market", Larsen added.

NatWest Markets CEO Robert Begbie noted that due to the highly regulated standards of the banking industry, the collaboration will remove the need for multiple intermediaries, simplify the processes for carbon credit sellers and help buyers to "trust the process more".