An international coalition of banks, including Canada’s CIBC, Brazil’s Itaú Unibanco, National Australia Bank, and Scotland-based NatWest Group announced today the launch of Project Carbon, a new pilot voluntary carbon marketplace.
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. Research by climate-focused Startup Sylvera forecasts a significant increase in the price of carbon as the inventory of voluntary carbon credits drops.
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.
With the new project, the banks aim to facilitate increased delivery of high-quality carbon offset projects, a liquid carbon credit marketplace with price certainty and transparency, the creation of a strong ecosystem to support the offset market, and the development of tools to help clients manage climate risk. The pilot is built on a private Ethereum platform developed with blockchain-focused software engineering provider ConsenSys.
Key features of the marketplace include enabling owners of credits to clearly demonstrate possession to the market, with full traceability and linkage back to source of the credit, price discovery through the posting of executed trade sizes and prices to the market, and post trade settlement, allowing all market participants including exchanges and marketplaces to offer value add services on top.
Victor Dodig, President and Chief Executive Officer, CIBC; Milton Maluhy Filho, CEO, Itaú Unibanco; Ross McEwan, Group CEO, National Australia Bank; Alison Rose, CEO, NatWest Group said:
“Tackling climate change is everyone’s job. We’re helping to find solutions and support our customers as they take action to transition to Net-Zero by 2050. Project Carbon is a terrific example of how technologies such as blockchain can address existing barriers and make carbon offsets more accessible for our customers – as part of their broader plans to reduce overall emissions and achieve their own targets.”
The new pilot follows the recent formation of Climate Impact X (CIX), a joint venture by DBS Bank (DBS), Singapore Exchange (SGX), Standard Chartered and Temasek aiming to establish a global exchange and marketplace for high-quality carbon credits.