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To address industry calls for greater transparency and price certainty, CIX has introduced the first daily on-exchange liquidity window in the voluntary carbon market with firm bids and offers. This dedicated 30-minute pricing session pools all-day liquidity from Asia, Europe and Middle East to help sharpen benchmark prices and improve order depth for spot nature-based credits.
By close of trading on 7 June 2023, bids and offers had converged to just a few cents and seven transactions totalling 12,000 tonnes of carbon credits had traded and cleared on CIX’s first standardised contract announced in March, CIX Nature X.
Bids, offers and transactions came from a variety of active market participants spanning leading project developers and suppliers, major financial institutions, trading houses and corporate end-users, demonstrating support for price discovery and market scaling. The first trades were executed by Chevron (International) Trading Pte Ltd, CICC Commodity Trading Limited, Engie Energy Marketing Singapore and Standard Chartered. Other supporters that participated include Carbon Growth Partners, DBS Bank, Hana Securities, RWE Supply & Trading, South Pole, Viridios Capital and Vitol Asia.
Chris Leeds, Head of Carbon Markets Development, Standard Chartered, said, “Nature X represents the level of transparency, pricing certainty and market representation that is critical to achieve scale and inspire confidence in carbon markets. By participating in this inaugural trading of Nature X, Standard Chartered is pleased to support the development of a liquid carbon credit market. We are confident that Nature X will become a key benchmark that will enable project developers to more effectively manage their price risks, and in doing so potentially draw more funds towards quality projects that will help cut global emissions in line with the Paris Agreement.”
John Kuehn, Supply & Trading President, Chevron, said, “At Chevron, we believe the future of energy is lower carbon and are committed to delivering more reliable, more affordable, and cleaner energy to meet the world’s growing demands. Chevron is committed to a holistic carbon reduction strategy, and participating in CIX’s new spot exchange helps us meet that goal with a portfolio of credible, verifiable, and sustainable credit units.”
Marking the debut of its pricing intelligence unveiled in May, CIX published a first assessment of USD $5.36 per tonne for leading nature-based avoidance credits with vintages of 2019-2022.
William Chin, Head of Commodities, SGX Group, said, “CIX’s successful launch of its spot trading platform is an important milestone towards enhancing liquidity and price transparency in the voluntary carbon markets. In line with SGX Group’s commitment to support global investors and companies in their transition towards net zero, we will collaborate with CIX on developing critical risk management tools that are central to achieving our collective global climate ambitions.”
Ariel Perez, Managing Partner at Vertree, a part of Hartree Partners, said, “Vertree is excited to help drive innovation and improved price discovery in the carbon market. We need continued developments like Nature X for the carbon market to live up to its promise and reach the scale needed to limit global warming to 1.5°C.”
BUILT FOR THE LONG-TERM
CIX Exchange is custom-built for extensibility and modularity to enable effective and dynamic scaling alongside market demands for new credit types, projects and standardised contracts. This provides enhanced trading and pricing functionalities to support further network, technology and data partnerships needed to scale carbon markets.
Roland Chai, Executive Vice President and Head of Marketplace Technology, Nasdaq, said, “The launch of CIX Exchange marks a significant step forward in the development and institutionalisation of the voluntary carbon market. Leveraging Nasdaq’s cloud-based trading technology, CIX will have the ability to match orders across multiple parameters, providing clear price signals to the market and empowering buyers to acquire credits specific to their requirements. With decades of experience as a market operator and technology partner to market infrastructures globally, Nasdaq is uniquely positioned to support the development of CIX’s carbon market.”
Mikkel Larsen, CEO of CIX, added, “This is an exciting chapter for CIX. The launch of our spot exchange completes the build of our core venues, which have been customised for the widest range of end-user, investor and intermediary needs. CIX is uniquely positioned to cater to all major user requirements in the carbon markets ecosystem. Our expanded breadth of solutions and unrivalled user experience reflect our purpose and shareholder vision: to leverage the power of carbon markets with trust and transparency to unlock finance – at the speed and scale necessary – to meet global climate ambitions, protect nature and safeguard local communities.”
To complement on-screen trading activities on CIX Exchange, CIX also launched a new clearing and settlement service for privately negotiated transactions, CIX Clear. The service will enhance the accessibility and scalability of carbon markets by reducing onboarding friction and counterparty risk when establishing bilateral trade relationships.
THE CASE FOR NATURE PRESERVATION
CIX Exchange currently lists 34 single nature-based projects which have been verified by Verra and curated from around the world. These projects support Reducing Emissions from Deforestation and Forest Degradation (REDD+), Improved Forest Management (IFM) and Afforestation, Reforestation & Revegetation (ARR). This includes the 11 projects that are eligible for delivery into Nature X.
Trading individually listed projects alongside standardised contracts support the evolution of carbon trading, providing an alternative avenue for the transparent discovery of pricing differentials among subtypes of carbon credits and specific project brands.
According to latest reports by the Intergovernmental Panel on Climate Change and Natural Climate Solutions (NCS) Alliance, there is no credible pathway to 1.5°C without immediate action to halt deforestation. Investing in NCS credits can help to address major gaps in funding.
Gerald Prolman, CEO of Everland, said, "This is a really important development for the voluntary carbon market as it will promote liquidity and price transparency around high integrity REDD+ projects. That is a critical step in building buyer confidence, and providing sustainable revenue streams to communities on the front lines of the climate crisis. These communities need reliable alternative sources of income over the long term to create the right incentive to preserve and protect our forests. That is the only way to ensure a tree is not worth more dead than alive."
Note to Editors:
- CIX Exchange trading hours are Mondays to Fridays, 12:00-18:30 SGT and is complemented by a 30-minute daily pricing session at 17:00-17:30 SGT.
- This launch follows extensive consultations with about 100 core market participants, including experienced project developers, industry and corporate end-users, merchant banks, trading houses, carbon and commodity brokerages, ratings agencies and NGOs.
About Climate Impact X
Climate Impact X (CIX) is a global marketplace, auctions house and exchange for trusted carbon credits based in Singapore, jointly owned by DBS Bank, Singapore Exchange (SGX Group), Standard Chartered and Temasek’s decarbonisation investment platform company GenZero. CIX’s mission is to bring to market and scale demand for existing, new and emerging carbon credits through a suite of solutions underpinned by trust, transparency and integrity.
CIX Marketplace offers seamless access to curated projects to reduce friction for businesses starting on their carbon compensation journey, help them go further in climate action and support corporate sustainability goals. CIX Auctions is a specialised platform for discovering the value of unique and desirable projects, newly issued credits or customised portfolios of projects. CIX Exchange enables two-way spot trading of standardised contracts and individually listed carbon credit projects, concentrating liquidity and providing the market with price transparency and risk management solutions. Follow us on LinkedIn.