Climate Impact X to launch new governance body-aligned carbon contract
Wong Pei Ting
SINGAPORE-based carbon exchange Climate Impact X (CIX) will be launching a new set of standardised carbon contracts.
This is aimed at supporting a projected demand for credits labelled as credible by the Integrity Council for the Voluntary Carbon Market (ICVCM).
The ICVCM is the market’s key governance body that is tasked with setting up and enforcing a definitive global threshold for “high-integrity” carbon credits.
To do that, the body is sorting voluntary carbon credits according to its 10-pointer Core Carbon Principles (CCP), and labelling them as CCP-approved, so the market can differentiate them as the ones meeting the global standard for high-integrity carbon credits.
CIX’s new set of standardised contracts – its third since its spot exchange started trading in June – will field the CCP credits, which are not available in the market yet and are expected to come on stream next year.
They would complement its existing suite of contracts, which are built around forest conservation projects under Redd+ – a United Nations framework guiding activities that reduces emissions from deforestation and forest degradation – and cookstove projects.
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The new contract type was announced on Tuesday (Dec 5) by CIX’s chief executive Mikkel Larsen, who was speaking on a panel co-hosted by the ICVCM on the sidelines of the 2023 United Nations Climate Change Conference.
In a statement that followed, CIX – which was jointly established by DBS, Singapore Exchange, Standard Chartered and Temasek – indicated that its current suite of non-CCP contracts would be converted to contain credits with CCP labels in time to come.
Its head of exchange, Ellery Sutanto, said the exchange will look into transitioning its existing non-CCP contracts “as appropriate” as CCP labels are increasingly rolled out, to reflect the “important new benchmark” for high-integrity carbon credits.
“A transparent, standardised and more efficient market will help to mobilise finance at the speed and scale necessary, and channel funds to projects that need it the most,” he added. “CIX standard contracts are designed to evolve over time in response to market conditions, ensuring ongoing relevance and contract integrity.”
Meanwhile, eligible single project instruments listed on CIX Exchange will carry a CCP label, enabling price discovery on such credits which are expected to trade at a premium, it pointed out.
This will be similar to how Article 6 authorisation labels will be reflected alongside projects on the exchange that can be used towards countries’ climate targets – called Nationally Determined Contributions – as CIX announced via market notice last week.
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