DBS Bank (DBS), Singapore Exchange (SGX), Standard Chartered and Temasek announced the formation of Climate Impact X (CIX), a new joint venture aiming to establish a global exchange and marketplace for high-quality carbon credits.

According to the partners, CIX will offer 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.

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 a lack of data and consistent methods to assess the effectiveness of the projects. With the new venture, the partners aim to help deliver the necessary transparency to enable the market to develop and grow.

Mikkel Larsen, Interim CEO of Climate Impact X and Chief Sustainability Officer at DBS, said:

“By facilitating a well-functioning marketplace with strong impact and risk data, CIX will enable efficient price discovery and catalyse the development of new projects.”

In order to meet the needs of different buyers and sellers, CIX will launch two platforms, Exchange and Project Marketplace, by the end of 2021. Exchange will facilitate the sale of large-scale high-quality carbon credits through standardised contracts – catering primarily to multinational corporations (MNCs) and institutional investors. Project Marketplace will cater to a broader spectrum of corporates seeking to participate in the voluntary carbon market, offering them a curated selection of projects that can help meet their sustainability objectives.

Bill Winters, Group Chief Executive, Standard Chartered, said:

“To meet our shared climate objectives, we need to see a significant capital shift to these markets to protect nature and enable a sustainable low-carbon transition. Voluntary carbon markets are necessary to accomplish this transfer efficiently and, as set out in the work of the Taskforce on Scaling Voluntary Carbon Markets, we must agree to a consistently high standard of carbon credits for this market to be credible and effective.”

The initial focus of the platforms will be on credits relating to Natural Climate Solutions (NCS), which help meet sustainability objectives through projects such as reforestation or ecosystem protection. CIX will feature carbon credits from various high-quality NCS projects around the globe.

Loh Boon Chye, Chief Executive Officer, SGX, said:

“SGX serves the ecosystem as a leading sustainable and transition financing and trading hub. Climate action is a key priority for us and we support internationally accepted carbon mitigation hierarchies. From avoiding and reducing emissions within companies’ operations and value chains, to using renewable energy sources wherever possible and finally neutralising and compensating for hard-to-abate emissions, we will work with our ecosystem throughout this journey.”

Rohit Sipahimalani, Chief Investment Strategist, Temasek, added:

“Climate Impact X aligns with our commitment to invest in businesses that will yield positive climate benefits as well as developments in their broader ecosystems for the long term. We are pleased that the platform will help organisations to address their carbon footprints through both market and natural climate solutions.”