Hong Kong Exchanges and Clearing Limited (HKEX) announced today the launch of Core Climate, a new marketplace for trading of voluntary carbon credits and instruments, and aimed at connecting capital with climate-related products and opportunities in Asia and international markets.
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.
While corporate demand for carbon credits grows, however, the development of the market faces barriers, including the need for access to capital at scale for the development of new climate projects worldwide, and for primary market access to a long-term supply of high-quality carbon credits for corporates and investors.
In response to this rapidly growing demand, several initiatives have emerged to help scale the development of the carbon credit market, including the London Stock Exchange’s launch earlier this month of the first public markets capital raising solution for the voluntary carbon market, and the introduction in September by Salesforce of Net Zero Marketplace, a new carbon market built on its eCommerce platform.
According to HKEX, participants on the new platform will be able to source, hold, trade, settle and retire voluntary carbon credits that come from internationally-certified carbon projects from around the world, including carbon avoidance, reduction and removal projects.
HKEX Chief Executive Officer Nicolas Aguzin said:
“Addressing the climate crisis demands decisive action and focused, significant regional and global cooperation. The role of capital markets is instrumental in finding the solutions to this, the most pressing issue of our generation. As a global East/West superconnector, HKEX is strongly positioned to build a vibrant and sustainable voluntary carbon market that brings together climate action ideas, capital and dialogue.”
The HKEX launch follows the exchanges’ establishment in July, of the Hong Kong International Carbon Market Council, a collaboration of leading corporates and financial institutions primarily focused on the development of an international carbon market, and to establish Hong Kong “as a premier carbon hub in Asia and beyond.” HKEX said that it will continue to collaborate with the council and stakeholders across the climate value chain to explore climate-related opportunities to enhance Core Climate over time.
HKEX Co-Head of Markets Glenda So said:
“We see Core Climate developing to become essential infrastructure, part of our highly connected international ecosystem, matching investment capital with new climate projects, technologies and business models. This will accelerate the shared Net Zero transition and secure a sustainable future for coming generations. I would like to thank all the members of the Hong Kong International Carbon Market Council for their valuable insight, guidance and support as we bring Core Climate to life. We are excited to go on this journey with you.”