An auction for change: CIX conducts pilot carbon credits auction
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An auction for change: CIX conducts pilot carbon credits auction

Climate Impact X

Highly anticipated carbon exchange and marketplace Climate Impact X (CIX) has finally sprung to life. The carbon exchange platform concluded its first pilot auction of high-end quality carbon credits. The auction was an astounding success. In all, 170,000 carbon credits generated by eight recognized Natural Climate Solutions (NCS) projects were auctioned at USD 8 per tonne.

What are carbon credits?

A carbon credit is a generic term used to refer to any tradable certificate or authorized permit that allows companies to emit exactly one tonne of CO­2 or an equivalent amount of any other GHG. Carbon credits have become the most preferred instrument for global businesses to reduce emissions and tackle greenhouse gas (GHG) concentrations.

Why CIX?

CIX is a Singapore-based carbon exchange platform that is the brainchild of DBS Bank, Singapore Exchange, Standard Chartered and Temasek. CIX has two digital platforms – Carbon Exchange and Project Marketplace – and will allow buyers and suppliers to trade carbon credits on a large scale. The Project Marketplace, in particular, will provided for highly customizable purchases for specific NCS projects.

The first CIX auction attracted the interest of many leaders across diverse industry sectors. The four main stakeholders also purchased carbon credits along with leading companies, including Berge Bulk, Boston Consulting Group, City Developments Limited, ENGIE, Gunung Capital, Marquis Energy Global, Mercuria Energy, SK Energy International, ST Telemedia Global Data Centres, STX Group and Trafigura.

As the global economy slowly picks up the pace after a devastating pandemic, much of the focus has shifted towards sustainable practices and a green transition. Carbon credits can help provide a holistic solution to address unavoidable carbon and GHG emissions by industries worldwide. It will also help fund reforestation projects to thwart biodiversity loss and aid local communities.

Commenting on the successful auction, Piyush Gupta, CEO, DBS Bank, said, “The Pilot Auction was great proof of the desire of both buyers and sellers to find each other through a trusted market mechanism. It was also robust demonstration that an auctioning platform works, and that high-quality carbon credits can command better value. We believe that this is an important step in the journey towards scaling the voluntary carbon market.”

The ongoing COP26 conference is expected to yield bigger commitments by participating nations towards reducing carbon emissions and adopting net-zero resolutions. India has already clarified its stand with Prime Minister Narendra Modi declaring that India is, in fact, adopting a net-zero commitment by 2070. CIX can prove to be a valuable ally for India in achieving this momentous goal.

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