Who Gives Carbon Credit Exchanges?

Carbon credits are a form of currency that gives companies the opportunity to offset their greenhouse gas emissions by purchasing and retiring credits from other businesses and projects. This system is a key part of cap-and-trade programs, which are designed to encourage companies to find innovative ways to reduce their emissions while incentivizing them to invest in cleaner technologies.

The current global carbon market is valued at nearly $2.4 trillion and is expected to grow significantly by 2027. This significant growth is due to increased emphasis on companies reducing their greenhouse gas emissions and the possibility of carbon credit mandates from various governments.

Many companies are choosing to purchase carbon credits from certified climate action projects as a way to offset their own greenhouse gas emissions. For example, the Swiss retailer Coop has a policy that requires all of its suppliers to provide Gold Standard-certified projects with verified emissions reductions within its supply chain. These projects are expected to produce measurable environmental co-benefits, such as improving air quality and promoting biodiversity.

In addition, some states have created their own exchange trading markets to reduce the impact of climate change. For example, the state of California has a cap-and-trade program that aims to cut greenhouse gases by 40 percent from its business-as-usual level by 2030. The program provides two main incentives for companies to cut their emissions: a requirement that they must buy extra credits if they exceed their allotted limit, and the opportunity to sell any unneeded credits to another company.

With the growing interest in buying and selling carbon credits, there is a need for an exchange that can match buyers with sellers. Many of these new carbon trading platforms are leveraging blockchain technology to build reliable and transparent carbon trading markets. This includes Xpansiv, which operates the largest spot exchange for ESG-inclusive commodities, including carbon, and AirCarbon Exchange (ACX).

These new platforms are designed to support the needs of both investors and traders. They offer a range of services that include trade, post-trade, financing and data infrastructure. They also offer a robust and resilient trading environment. In addition, they are built to scale as the marketplace grows.

The ACX platform uses blockchain to implement a digital carbon economy, connecting individuals and organizations with an ecosystem of carbon-saving solutions. This ecosystem connects businesses, financial institutions, investors and project developers with a diverse group of carbon buyers and sellers. It is also the first to use blockchain for the registration, verification and issuance of credits in a voluntary marketplace.

This system enables the transfer of carbon credit rights through a smart contract that ensures compliance and transparency. It offers a secure, scalable and cost-effective solution for the carbon market. The platform also supports the development of a new generation of emission reduction projects. It combines a core contract based on the underlying carbon principles and standard attributes with additional attributes that are defined according to a taxonomy and priced separately.