Carbon market platforms Carbonplace and Climate Impact X (CIX), announced a new collaboration today, aimed at scaling the accessibility and transparency of carbon credit trading, and reducing barriers to organizations seeking high-quality carbon credits on the voluntary carbon market.

Demand for carbon offset projects that counteract the release of greenhouse gases, and related credits, is expected to increase significantly over the next several years, as companies and businesses increasingly launch net zero ambitions, and turn to offsets as a bridge to their own absolute emissions reduction efforts, or to balance difficult to avoid emissions.

The market for carbon credits, however, is challenged by problems including a lack of liquidity, and insufficient or inconsistent data to assess the effectiveness of the projects.

Mikkel Larsen, CEO of CIX, said:

“Voluntary carbon credits provide a robust, market-based approach to financing solutions for climate mitigation. However, the rate of finance is still very low compared to what is needed to keep global warming under a 2 degrees Celsius pathway by 2030.”

Initially launched as Project Carbon in July 2021 by a coalition of banks including CIBC, Brazil’s Itaú Unibanco, National Australia Bank, and Scotland-based NatWest Group, with several others joining subsequently, Carbonplace aims to provide the IT infrastructure to facilitate reliable, secure, and scalable trading of high-integrity carbon credits. The platform is expected to be fully operational by the end of 2022.

CIX was launched last year through a joint venture between DBS, Singapore Exchange (SGX), Standard Chartered and Temasek, aimed at offering distinct platforms and products that cater to the needs of different buyers and sellers, leveraging satellite monitoring, machine learning and blockchain technology to enhance the transparency, integrity and quality of carbon credits.

Earlier this month, CIX launched Project Marketplace, a new platform enabling businesses and carbon project suppliers to list, discover, compare, buy and retire carbon credits.

Under the new collaboration, the organizations will develop a pilot to establish the technical, legal, and operational framework for executing carbon credit transactions via CIX’s Project Marketplace, with Carbonplace performing all settlements.

According to the organizations, the project will allow companies and financial institutions of all sizes to buy and trade carbon credits, funding large scale emissions reduction or removal projects, bringing together Carbonplace’s wide client base, technology and services with CIX’s curated marketplace of quality-assured credits.

Robert Begbie, CEO of NatWest Markets, said:

“Collaborating with CIX has the opportunity to transform the voluntary carbon credit market. 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.”

Larsen added:

“The collaboration between Carbonplace and CIX, through Project Marketplace, brings together easy access to curated, quality credits and a settlement system underpinned by transparency and integrity. It is precisely the type of accelerator we need for scaling up the voluntary carbon market.”