S&P Global Platts and Xpansiv Partner to Advance Price Transparency in Global Carbon Markets

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S&P Global Platts and Xpansiv Partner to Advance Price Transparency in Global Carbon Markets

S&P Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets, and Xpansiv, the global marketplace for ESG commodities, today announced an agreement to collaborate on the development and distribution of assessed daily closing prices for voluntary carbon market instruments.

The agreement on international carbon accounting rules reached at COP26 provides a strong foundation to develop the collaboration.

The initiative will bring increased transparency, rigor, and integrity to the pricing of voluntary carbon market (VCM) assets, providing the market with greater confidence. It brings together Xpansiv’s expertise as the global leader in trading physical carbon offsets with Platts’ market-leading experience providing pricing transparency to the developing VCM markets.

“This partnership brings together all the necessary elements of a well-ordered market ecosystem—price transparency, liquid spot and futures markets, and robust market data,” said John Melby, Xpansiv President and Chief Operating Officer. “It will enable the carbon market to further scale to accommodate demand and provide much-needed investment in high-quality carbon offset projects.”

“The voluntary markets have the potential to play a pivotal role in helping close the gap between what governments can deliver and what the world needs to achieve in terms of overall emissions reductions,” said Saugata Saha, President, S&P Global Platts.

“The value of the market is now more than $1 billion and forecast to increase fifteen-fold by 2030, according to the Taskforce on Scaling Voluntary Carbon Markets. Our suite of VCM assessments is providing increased transparency and understanding of these markets, and this partnership with Xpansiv will enable us to develop scalable opportunities as this market continues to evolve.”

Under the agreement, Xpansiv marketplace CBL—the world’s largest exchange for spot-market trading of physical carbon offsets—will expand the data it makes available to Platts for the development and management of daily market price assessments. In addition, Platts and Xpansiv will collaborate with market participants to develop new types of price assessments and spot contracts to respond to rapidly evolving demand.

Notes to Editors

Xpansiv’s XSignals business unit currently assesses daily closing prices used to settle the CBL Global Emissions Offset™ (GEO®) and Nature-Based Global Emissions Offset™ (N-GEO™) which underpin CME Group’s futures contracts. As part of the collaboration, Platts will work with Xpansiv to establish the value of settlement prices, bringing its long track record of aligning with IOSCO objectives and principles to settling the value of carbon market prices.

S&P Global Platts launched the market’s first daily voluntary carbon credit assessments with the publication of Platts CEC, representing CORSIA-eligible carbon credits which have surged by 944% since being launched in January 2021, with the value now pegged at $8.35/mt at the close on Nov. 12. Throughout this year, Platts has expanded its suite of VCM assessments to include Platts CNC, which reflects nature-based carbon credits as well as a variety of project types including removal, avoidance, renewable, and methane-collection credits.

In October, Xpansiv and Platts launched a new benchmark for methane performance in natural gas production to support the launch of Xpansiv’s Methane Performance Certificate (MPC). The MPC enables natural gas producers to earn a premium for natural gas produced and transported with low methane emissions intensity.

About Xpansiv

Xpansiv is the global marketplace for ESG-inclusive commodities. These Intelligent Commodities bring transparency and liquidity to markets, empowering participants to value energy, carbon, and water to meet the challenges of an information-rich, resource-constrained world. The company’s main business units include CBL, the largest spot exchange for ESG commodities, including carbon, renewable energy certificates, and Digital Natural Gas™; H2OX, the leading spot exchange for water in Australia; XSignals, which provides end-of-day and historical market data; and EMA, the leading multi-registry portfolio management system for all ESG-inclusive commodities. Xpansiv is the digital nexus where ESG and price signals merge. Xpansiv.com

 

Uber to Focus on Latin America Offsets

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Uber to Focus on Latin America Offsets

To reach their 2040 carbon-neutral goal, Uber has decided to purchase offsets within Latin America. Uber’s initiative, “Uber Planet,” has already launched in Mexico. It offers customers the option to pay an extra .37 pesos per kilometer to purchase carbon credits. These credits are then used to offset the carbon from their ride.

Uber initially avoided buying carbon credits. Instead, they focused their efforts on drivers switching to electric vehicles (by providing subsidies). Unfortunately, this didn’t seem practical in Latin America, so they decided carbon credits, in addition to subsidies for electric vehicles, would be the way to go.

What are Carbon Credits and Carbon Offsets?

Carbon credits are purchased and used to “offset” carbon emissions through an environmental project. Some critics feel this process doesn’t encourage companies to reduce carbon. In fact, Uber felt this way, too, saying that offsets “effectively pay to be someone else’s responsibility.” Plus, they felt that verification challenges made the industry weak.

However, the carbon credit industry is changing. The verification process has significantly improved – and, since leaders at COP26 have decided to move forward with a global standard, the industry will become even more transparent.

Uber Planet Carbon Credits

Uber Planet credits are certified by the United Nations Framework Convention on Climate Change (UNFCCC) and the Climate Action Reserve (CAR). Both are well respected.

David Minguez, an Uber spokesperson in Mexico, said, “Every market where Uber is available is taking bold steps to develop locally relevant strategies that run in parallel with our commitments. At this moment, we are presenting Uber Planet, understanding the urgency needed to crack down on this challenge immediately.”

Minguez went on to say that the company would also take additional steps to “encourage more drivers to switch to electric or hybrid cars, including promotional prices for the vehicles and incentives like an extra 10,000 pesos per 160 trips.”

Uber recognizes that carbon offsets are not the only way to fight climate change. But, when used alongside new technology, they are an integral part. As more companies and countries merge the two, carbon neutrality and net-zero emissions goals can become a reality.

Billionaire Investor Mark Cuban Purchasing $50K in Tokenized Offsets Every 10 Days

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Billionaire Investor Mark Cuban Purchasing $50K in Tokenized Offsets Every 10 Days

Mark Cuban is the latest billionaire to recognize the power of the carbon offset industry. On Saturday, Cuban announced that he has been purchasing $50K worth of tokenized carbon offsets every 10 days and hopes to do even more.

“I’ve been buying 50k in offsets every 10 days or so, verifying them and putting them on-chain as BCT,” said Cuban via Twitter. “I would love to do the same thing and probably more with removal within KLIMA.”

What are carbon credits and carbon offsets?

If you aren’t familiar with the carbon credit industry – it is booming. Countries and companies alike recognize its role in the fight against climate change, which is why world leaders at COP26 agreed to create a global standard.

Simply put, carbon offsets are purchased using carbon credits on a carbon marketplace. For each individual carbon credit purchased, one metric ton of carbon is removed from the atmosphere through an environmental project – such as reforestation.

The carbon offset doesn’t only have the power to help improve the environment. The projects used to offset carbon can help spark economic growth across the globe.

How is Cuban purchasing carbon offsets?

Cuban is using blockchain technology to purchase offsets on Klima. Klima is a decentralized autonomous organization (DAO) with $100 million worth of carbon offsets (about 9 million tons of carbon).

The offsets on Klima DAO are Base Carbon Tonnes (BCT), a “digital” form of carbon credits. So, just like the regular carbon marketplace, one ton of carbon is equal to one BCT (just how one ton of carbon is equal to one carbon credit).

With new standards being put in place globally and more accessibility (through blockchain), the industry can improve and grow. Experts believe the carbon offset industry will reach $100 billion by 2030, up from just $300 million in 2018.

New Blockchain Carbon Credit Marketplace to be Built by Cambridge University

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New Blockchain Carbon Credit Marketplace to be Built by Cambridge University

Cambridge University is building a new blockchain carbon credit marketplace to preserve biodiversity. The program, called Cambridge Centre for Carbon Credits (otherwise known as 4C), will be run by computer scientists and conservation scientists, focusing on reforestation projects. The marketplace will be built using Tezos blockchain.

What is a carbon credit?

Carbon credits are traded on a platform – such as a carbon credit marketplace – to help offset carbon emissions. So, for every (one) carbon credit purchased, one metric ton of carbon is “offset” from the atmosphere through an environmental project.

Many countries and companies have been turning to the carbon credit industry to remain environmentally friendly as they work to achieve net-zero emissions. Keep in mind that net-zero isn’t possible for many industries since the technology doesn’t exist yet. So, carbon credits can help them meet new regulations.

Why did Cambridge choose Tezos?

According to Dr. Anil Madhavapeddy, an Associate Professor of Computer Science at Cambridge, Tezos was selected because the cryptocurrency is available on exchanges across the globe.

“We have to make sure that any schemes we fund can be supported over the course of decades, and Tezos is unique among blockchains in that it supports a built-in self-amending mechanism via distributed governance,” said Madhavapeddy.

“This means that the technology we choose will not be left behind, but it will continue to evolve and grow with the needs of the transactions happening with the network, which as I mentioned before, I hope will dramatically increase as the size of the voluntary carbon officer market increases over the next decade.”

What does this mean for the carbon credit industry?

Madhavapeddy went on to say that trust was crucial for ensuring that the marketplace succeeded so that “purchasers of carbon credits can confidently and directly fund trusted nature-based projects.”

With a new global standard set at COP26 and expanded interest in the worldwide carbon marketplace, efforts such as this demonstrate the integral role carbon credits play in the fight against climate change. As the industry becomes more transparent – alleviating some critic concerns – the market is only expected to grow.

The global carbon market is expected to be valued at $100 billion by 2030– up from just $300 million in 2018.

COP26: Global Carbon Market Deal Reached

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COP26: Global Carbon Market Deal Reached

Leaders at COP26 have reached a deal to standardize the international carbon trading market. Some estimate that the new UN-supervised marketplace could be worth as much as $100 billion.

What is the carbon marketplace?

The carbon marketplace is where carbon credits are purchased to offset emissions through environmental projects (such as reforestation). One carbon credit equals one metric ton of carbon.

Companies use offsets when they do not have the technology needed to reduce emissions. This way, they can still operate in an environmentally friendly way while working to achieve net-zero.

Now, with a global standard in place, many expect the carbon marketplace to expand rapidly. It has boomed this year alone, reaching $1 billion (up from $300 million in 2018).

Experts predict the global carbon market could reach $22 trillion by 2050.

How will the global carbon trading market work?

There are two parts to this new agreement:

• The creation of a central system that will be open to public and private sectors; and,
• A separate, bilateral system that will allow countries to trade credits.

While some critics feel the carbon credits offered will be for low-quality environmental projects – Dirk Forrister, Chief Executive of the International Emissions Trading Association, said the outcome was “solid and ambitious,” leaving it up to the private sector to “channel green investment using these new market structures and accelerate the race to net zero.”

Why is this new system an improvement?

COP26 decision creates a global approach to standards. It will be the first-time nations have a united standard to go by – which is a significant win.

• It can help make sure identical emissions reductions aren’t claimed by numerous countries or organizations.
• Countries can now ensure that their deals are subject to the same standards across the globe.
• Companies will have a more difficult time fudging their green credentials through imported credits.

“Article 6 provides the rules necessary for a robust, transparent, and accountable carbon market,” said Kelley Kozier, Vice President for Global Climate at the Environmental Defense Fund and a former negotiator.

In addition to an improved credit marketplace, at COP26, over 450 financial institutions – representing 45 different counties, with nearly $130 trillion in assets – committed to investing green.

Progress is being made.

COP 26 – Markets Wait For No One

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COP 26 – Markets Wait For No One

NO DEAL! The clock is ticking on COP 26, and there’s no end in sight for the Article 6 agreements.

No rules – yet – for an expanded, global carbon trading market.

The summit didn’t officially end until Friday afternoon, and there’s always the chance of some overtime into the weekend.

An initial draft of an agreement is already making the rounds . . . but there’s something missing.

What about Article 6?

As with the previous Conferences of the Parties, agreeing on a framework for an international carbon trading market has proven more than a little thorny.

The holdup, as always, comes down to finances and figuring out what counts as a carbon offset.

Resolve those questions, the thinking goes, and regulators could potentially unleash a global market already worth millions of dollars per year.

The odd thing?

The markets aren’t waiting.

The very idea of regulators controlling an emerging market is ridiculous and ignores how markets typically work. Ahead of any final decision by the COP 26 negotiators, carbon credit prices are surging.

Australia notched a new high, even as the justice minister of Tuvalu gave an impassioned address to the COP.

Giving an address while knee-deep in the rising seas was a poignant touch, but there’s no guarantee the delegates at COP 26 heard him.

But the markets are already listening.

To live up to their potential, carbon offset prices need to continue to increase dramatically.

Most experts agree that prices need to be close to $150 per metric tonne in order to push companies to make the necessary changes. Is that far-fetched?

Evergrow just scored a 7-million-dollar seed round, leading the way for a growing wave of climate tech companies.

The California offset market is up 384% year-over-year. New initiatives are launching even as the negotiators struggle over minute details of the new regulations.

Business as usual for the COP, which failed to settle on a framework at the last two conferences in Madrid and Katowice.

Maybe the negotiators will pull through, and COP 26 will end in triumph, with a long-overdue framework for an international market.

There have been a number of surprises already, from China and the US agreeing on an emissions deal, to Brazil showing some willingness to negotiate on the issue of Kyoto-era credits.

But in the meantime, markets aren’t waiting. The VCM continues to grow, even as global warming pushes sea levels higher.

In other words, it’s also business as usual for the VCM.

Markets find a way, even when governments don’t.

COP 26 might have to go into overtime to strike a deal and the VCM is just beginning.

$7M Seed Round Raised by Evergrow

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$7M Seed Round Raised by Evergrow

Evergrow has raised a $7M seed round. As one of the world’s first carbon offtake company, Evergrow’s goal is to provide offtake contracts and financing for projects that avoid, capture, or remove carbon emissions.

This seed round, which was co-led by Rodd Fubini at XYZ and Abe Yokell Congruent, will only strengthen Evergrow’s mission as they look to reach their goal of permanently avoiding or removing 1 billion tons of carbon by 2030. They hope to scale to 1 billion tons per year shortly after that.

According to Evergrow’s Co-Founder and CEO, James Richards, “It’s no secret that we urgently need to decarbonize our economy and remove tens of billions of tons of carbon emissions from the atmosphere to combat and reverse climate change.

This will require the deployment of trillions of dollars worth of new infrastructure projects, from clean power plants to alternative fuel refineries to direct air capture facilities and more. The faster we build these projects, the better we will fare in our fight against climate change.”

Many critics feel that the carbon market needs improvement since the lack of standards misrepresents credit quality. Though these concerns are valid, the industry is changing (and for the better).

The carbon market is becoming far more transparent than it has ever been. Plus, there have been talks of enacting a global standard for verifications for quite some time.

Evergrow plans to use their technology, data, and finance to deliver high-quality offtake contracts for carbon commodities. This way, they can pay people to reduce and remove carbon emissions while monetizing their carbon commodities. Richards hopes this will unlock additional financing for carbon reduction and help transition the globe into carbon neutrality.

The round included funds from First Round Capital, Garuda Ventures, Skyview Ventures, My Climate Journey, Zach Perrett (CEO, Plaid), Max Mullen (Co-founder, Instacart), Justin Kan (Co-founder, Twitch), Peter Reinhardt (CEO, Charm Industrial), Maddie Hall (CEO, Living Carbon), Michael Tanenbaum (CFO, Brex), Erica Dorfman (SVP Capital Markets, Brex), Karen Karniol-Tambour (Co-CIO for Sustainability, Bridgewater Associates), and others.

The voluntary carbon market is expected to be valued at $100 billion by 2030 – up from $300 million in 2018.

Richards went on to say that Evergrow is “assembling the world’s best team in climate technology and finance. The climate crisis is an existential threat to all of us, and we’re betting on humanity to win.”

London Stock Exchange Goal: Transparency Concerning Carbon

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London Stock Exchange Goal: Transparency Concerning Carbon

The London Stock Exchange has a new market to scale funding for projects that reduce carbon emissions. The goal is to make funding more transparent, which should help bring the industry to scale – a significant step forward for the carbon credit industry.

The voluntary carbon market is an exchange that companies use to offset their carbon emissions. One metric ton of carbon is “offset” from the atmosphere through an environmental project for every carbon credit purchased.

Companies use this method to offset their carbon emissions (especially when the technology isn’t available yet to remove emissions altogether).  The industry has boomed this past year as governments and companies alike look to meet Paris Agreement standards.

According to LSE, though the voluntary carbon market has great promise, it “remains small and fragmented and as such it lacks the market infrastructure and access to institutional investors that will truly enable it to scale.”

In an interview with CNBC’s “Squawk Box Europe,” LSE CEO Julia Hoggett said, “One of the challenges we’ve had in this market is that it has been … less transparent and less visible to everybody in terms of participants and how the [climate change mitigation] projects are managed.”

By raising the profile of the public listed fud market, the LSA can enhance the disclosures and visibility and increase the capital. This will make the voluntary carbon market more visible and accessible.

At COP26, British Finance Minister Sunak said that the UK will expect financial firms to publish their climate change mitigation plans by 2023.

LSE’s statement went on to say, “We anticipate that corporates and other organizations with long-term needs for carbon credits will become investors, using the carbon credits delivered by these vehicles – which may be issued as an alternative or additional dividend – to meet a portion of their offset need.”

The global carbon market is expected to reach $100 billion by 2030. Some experts believe it is on track to reach $22 trillion by 2050.

John Kerry Believes COP26 Negotiations Will Result in Deal on Carbon-Trading Rules

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John Kerry Believes COP26 Negotiations Will Result in Deal on Carbon-Trading Rules

After more than six years of negotiations, John Kerry believes world leaders are ready to reach a deal on carbon-trading rules.

This would be a massive victory for the offset market and be a significant victory for climate diplomacy.

The carbon credit industry has grown exponentially over the past year as companies and governments look for ways to offset their carbon emissions.

However popular, critics feel that the industry lacks the regulatory standards needed to be effective. If world leaders can agree, the industry would become far more transparent – alleviating many concerns.

The carbon trading industry can offset emissions, improve the environment, and spark economic development in areas that need it most. Combined with innovative technology and additional regulations, the global carbon marketplace is a driving force in the fight against climate change – which is why an international standard is so important.

In addition to carbon trading rules, Kerry has been negotiating with Russia and China to reduce their methane gas emission. More than 105 countries have signed up to reduce their methane emissions by 30%. Though China hasn’t signed on, Kerry feels that the country has shown a commitment to doing more than they have been.

The US has set a goal to decarbonize the power sector by 2035 and eliminate coal plants by 2030.

If carbon trading rules are implemented globally, the carbon credit industry will only continue to grow. Right now, the voluntary carbon market is on track to reach $100 billion by 2030 (up from $300 million in 2018). Some experts believe it could be valued at $22 trillion by 2050.

Regarding COP26, Kerry was quoted as saying, ““We have to have a measurement of ambition. This is a long journey and now really is the test of whether we can get there.”

Carbon Market Talks Ongoing at COP26

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Carbon Market Talks Ongoing at COP26

Discussions about international carbon markets have faced some challenges at COP26. The US and EU expressed concerns about the proposed transaction tax on carbon trading. Proceeds of this tax would support nations that are the most impacted by climate change.

It is reported that US officials feel such a plan is not feasible. They are concerned that the federal government will end up having to foot the bill for such taxes.

While all nations can agree that the global offset market needs to become more transparent and that verification processes (and standards) should improve, there are two competing thoughts:

1.) Create a bilateral carbon credit exchange that could help countries meet national targets.
2.) Create a global marketplace for trading offsets.

Norway and Singapore seem to be trying to get nations on board with merging the two.

About the discussions, Norwegian Climate and Environment Minister Espen Barth Eide was quoted as saying that “It’s difficult.” Though there is “a can-do mood.”

The global carbon market is currently valued at $100 billion – up from just $300 million in 2018. Some project it could reach $22 trillion by 2050.

While the carbon market can help reduce emissions, improve the environment, and spark economies across the globe, critics feel that the industry does little to encourage net-zero emissions.

World leaders disagree.

Yes, the industry has its flaws, but carbon offsets are integral in the fight against climate change. If they weren’t, the heavy focus on the offset industry at COP26 wouldn’t be taking place.

Contrary to what critics may say, offsets were never designed to be the only way to combat climate change. However, when used alongside technological advances, and increased regulation, they play a significant role.

It will be an environmental win if nations can figure out how to make the global carbon market work for all.  Leaders have until Friday.

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