Climate change is a global emergency and immediate action needs to be taken to mitigate its effects. Soon to be jointly established by DBS Bank, Singapore Exchange, Standard Chartered and Temasek, Climate Impact X (CIX) is envisioned to be a global exchange and marketplace for high-quality carbon credits. This is also an initiative spearheaded by Singapore's Emerging Stronger Taskforce's Alliance for Action (AfA) on Sustainability. CIX will be headquartered in Singapore and will leverage on the country's internationally-recognised financial, legal and commodities hub infrastructures.
CIX aims to connect an ecosystem of partners while leveraging on satellite monitoring, machine learning and blockchain to enhance transparency integrity and quality of carbon credits. With this, corporations are empowered to implement a holistic climate mitigation strategy and take effective action in carbon reduction efforts to meet net-zero goals [1].
"Climate Impact X will provide a solution for corporates to address unavoidable carbon emissions in the near term and propel the development of new carbon credit projects worldwide. With an initial focus on Natural Climate Solutions, the carbon credits will also create impetus to address another grave risk of biodiversity loss and help serve local communities. CIX will build on collective action by global governments, corporates and individuals to achieve a net-zero economy."
- Mikkel Larsen, DBS Chief Sustainability Officer & Interim CEO of Climate Impact X
Singapore Exchange's Role in Climate Impact X
Driven by corporate climate commitments, global demand for high-quality carbon credits in the voluntary carbon market is expected to increase an estimated fifteenfold by 2030. This approximates 2 gigatons of carbon dioxide (GtCO2) annually [2]. To champion this effort, the Singapore Exchange (SGX), with the support of banks in Singapore, is utilising their experience in operating market infrastructure to take into account the experiences of clients and market demand to create a robust, global marketplace. Within Singapore, as a business, SGX is regarded as a regulator with an accompanying ecosystem as a leading sustainable and transition financing and trading hub.
Platforms
It is undeniable that reducing emissions can be very costly or even near impossible using existing technologies. Thus, when a company is cognisant of this inability to act on emission reduction, it may choose to purchase a carbon credit as a way to offset the greenhouse gases its operations are releasing. CIX thus presents a viable solution for companies unable to pursue a decarbonisation strategy, which fulfills their short-term commitments.
CIX will offer distinct platforms and products to ensure the needs of different carbon credit buyers and sellers are met. They will work with global partners and international working groups such as the Taskforce on Scaling Voluntary Carbon Market (TSVCM) and the Natural Climate Solutions Alliance, to ensure standards align, are of respectable quality and embody integrity [3]. The 2 main digital platforms are:
The Exchange
The Project Marketplace
Platform 1: The Carbon Exchange
This CIX platform is intended for buying and selling of large-scale, high-quality standardised contracts backed by eligible credits. Through this, carbon credit buyers and sellers - which are likely to consist of multinational corporations and institutional investors - have access to CIX's uniquely designed project baskets and other contracts aligned with leading global standards.
The Carbon Exchange uses transparent price signals and real-time market data to ensure all stakeholders can make informed decisions. All trade of liquid carbon credits on this platform, which are bound by contracts that are defined by a set of terms and quality definitions, can be executed with confidence as it takes place in a secure and trusted environment [4].
Platform 2: The Project Marketplace
The project marketplace is a platform for curated natural climate solution (NCS) projects that deliver carbon credits through the protection and restoration of forests, wetlands and mangroves. These projects also meet corporate sustainability objectives.
Through this platform, carbon credit buyers and sellers can discover high-quality, risk-rated projects that meet its corporate offsetting ambitions. Additionally, stakeholders are allowed to buy, compare and retire carbon credit whilst reporting and tracking the impact of project portfolio with data on carbon sequestration together with co-benefits.
Source: The Carbon Credit Ecosystem, Paia Consulting
Useful links:
Climate Impact X (link)
Carbon Offsets and Credits, Explained - Paia Consulting (link)
A blueprint for scaling voluntary carbon markets to meet the climate challenge, McKinsey Sustainability (link)
References:
[1] Climate Impact X, Singapore Exchange (link)
[2] DBS, SGX, Standard Chartered and Temasek to take climate action through global carbon exchange and marketplace (link)
[3] Joint venture to establish Climate Impact X, a global exchange and marketplace for carbon credits (link)
[4] Climate Impact X (link)
Contact the Royal Danish Embassy in Singapore for more information about business opportunities and how Denmark seeks to inspire green transition in Southeast Asia:
Mark Edward Perry
Sector Expert at Royal Danish Embassy Singapore
Phone: +65 9088 5567
Email: markpe@um.dk