Today is Friday, October 13, 2023.
As we anticipated, trading of carbon credits effectively started in Japan last Wednesday.
Japan's industry minister, said "We will use the power of the marketplace to create a system where those who work on cutting emissions can profit and those who don't must pay ... We are now willing to effectively use credit markets to realize both emission reduction and economic growth". Click here for and article from Nikkei Asia.
In Asia, other carbon trading markets are already set up in Singapore, Hong Kong, Malaysia and Indonesia, while China is expected for very soon.
According to the pioneer Singapore AirCarbon Exchange (ACX), a blockchain-based voluntary carbon marketplace (VCM) that was launched in 2019 partnering with UNFCCC, Abu Dhabi Global Market and Deutsche Börse AG, in its most recent newsletter: "The VCM remains quite fragmented, especially when it comes to REDD credits for which buyers are still preferring project-specific transactions. Credits from the well-known Katingan REDD project, vintage 2020, were reported at USD7.00/tCO2e. Afforestation and reforestation credits are trading at higher prices, with reports of credits from an ARR project in Ghana registered with Gold Standard, vintage 2018, being offered at USD17.00/tCO2e, and another from the US registered under ACR, vintage 2020, at USD34.00/tCO2e. In addition, a significant price gap is being noted between REDD+ credits with exclusive purchase agreements compared to those without such agreements."
That said, there are expectations to SBTi's recent call for evidence regarding the effectiveness on corporates’ use of Environmental Attribute Certificates to reach their climate targets, which includes carbon credits. The result of this consultation could "potentially have a significant impact on demand in the VCM if the SBTi were to allow for carbon credits to be used as an instrument for offsetting scope 1, 2 and 3 emissions".
Besides spot trading, there were news that the Deutsche Boerse AG could create futures contracts of carbon credits sourced by ACX. Click here for an article from PR Newswire.
By the way, this article also mentions ACX's exchange platform presence in Brazil, as we reported on January 2022. "Rio de Janeiro, BlockC, AirCarbon Exchange and a Carbon Credit Market in Brazil".
