Deutsche Börse and Guangzhou Futures Exchange (GFEX) have signed a Memorandum of Understanding (MoU) to facilitate carbon markets across China and Europe. They will now explore green finance product and service development opportunities together.
What are carbon markets and why are they so popular?
Companies purchase carbon credits through the carbon marketplace to offset GHG emissions through environmental projects. One credit equals one metric ton of carbon.
Many industries use offsets because the tech needed to get to net-zero doesn’t yet exist. So, the carbon market is a way to help the environment here and now.
The need for companies to reduce their GHG emissions, and a new global standard set at COP26, are behind the carbon market boom.
Currently, carbon markets are valued at $1 billion. Experts think they could reach $100 billion by 2030.
The carbon partnership between Deutsche and GFEX.
Thomas Book, Executive Board Member at Deutsche Börse, said, “Establishing this partnership is an important step to support the future of green development.”
GFEX Chairman, HU Zheng, had positive things to say as well. “2022 is the 50th anniversary of establishing diplomatic relations between China and Germany. We are very pleased to sign the MoU with Deutsche Börse.”
Does this carbon partnership impact the European Energy Exchange (EEX)?
The cooperation between GFEX and EEX is significant.
Peter Reitz, EEX’s CEO, said, “The introduction of a national carbon market in China last year was a milestone in China’s climate policy.”
But that isn’t all. Reitz feels that this partnership is a testament to, “the important role markets can play in cost-effectively facilitating green transformation.”
Per Reitz, “We are looking forward to partnering with GFEX in supporting the future development of the carbon market in China and beyond.”
Through this partnership, both Deutsche and GFEX hope to make the world’s GHG emissions goals a reality.