The leading spot exchange for environmental commodities, Xpansiv, announced two major deals with T-REX and I-REC.
Xpansiv and T-REX partner to directly link environmental performance data to sustainably financed projects through Xpansiv’s Universal Project Numbers (UPN).
Meanwhile, Xpansiv will launch trading in renewable energy certificates (RECs) from the International REC Standard (I-REC) and the Evident registry on its CBL spot exchange.
T-REX is a financial infrastructure provider for complex fixed income investments. It combines SaaS technology with data and asset class expertise to lower expenses, reduce risk exposure, and improve performance.
Tying the Knot Between Data and Finance
Just last month, Xpansiv announced it will provide access to intellectual property components that will let companies to identify environmental assets across their entire lifecycle – the Environmental Instrument Numbers (EINs). They are standardized reference numbers that Xpansiv Registry Services issues for each transferable asset upon issuance.
To boost EINs application in support of the energy transition, the exchange also provides access to its UPNs. They represent a reference number for any tangible energy transition asset beginning at the onset of finance.
By integrating Xpansiv’s UPN in T-REX platform, the latter expands its system’s availability to tackle challenges preventing the energy transition finance to scale up. It will also allow lenders to structure, monitor, and track the impacts of their sustainable financing.
For borrowers, the integration will improve transparency and simplify reporting while enabling portfolio monitoring, risk management, and investment impact measurement.
Andy Bose, a Senior VP at Xpansiv, had spoken about the deal:
“The T-REX platform will directly tie energy transition finance to environmental performance metrics using UPNs. The breadth and flexibility of T-REX’s platform and its broad base of top-tier financial institutions provides the ideal format to bridge sustainable finance with Xpansiv’s global registry and environmental market infrastructure.”
On their side, T-REX CEO Benjamin Cohen said that the integration of Xpansiv’s UPN will allow their clients to “track the real-time results of their investments across the lifecycle of any asset that is financed”. It will also enable companies to create data-driven sustainability-linked covenants and benchmark across a wider range of metrics. He added that:
“Trusted and scalable financial infrastructure is needed to facilitate the trillions of dollars of investment required to meet net zero greenhouse gas (GHG) emission goals by 2050.”
Xpansiv’s UPN-linked Environmental Instrument Numbers are used by the company to track billions of registered, tradable assets. These include renewable energy certificates, carbon credits, digital fuels, and recycled plastics.
The largest spot exchange for environmental commodities also announced that it will launch its newest instrument – the International Renewable Energy Certificates (I-REC) spot contracts.
No Silver Bullet, Only More Credits
Xpansiv will soon trade RECs from the I-REC Standard and the Evident registry on its CBL spot market. Adding the new contracts will expand the range of RECs and carbon credits currently trading on the platform. This will improve RECs’ price discovery and liquidity formation.
Launching the I-REC in Xpansiv’s market ecosystem will broaden options for developers and traders across Asia, Latin America, the Middle East, and Africa. The spot exchange currently trades about 100 global voluntary and compliance RECs, including North American and Australian RECs.
In 2021, CBL REC volumes rose 28% due to broader market participation and a sharp increase in solar REC traded. And given the projected rising demand for renewable energy, there’s also growing interests in trading of RECs globally.
According to research estimates, global REC market value will grow to over $111 billion.
Xpansiv will list different I-REC offerings based on host country and project type. The company will also integrate the Evident Registry, which issues and manages I-REC renewable energy products, with the exchange trading platform and multi-asset, multi-registry portfolio management system.
Commenting on this development, another Senior VP at Xpansiv said that “there is no silver bullet in the energy transition”. Instead, market players need various tools to meet their decarbonization goals.
I-RECs are a useful addition to the diverse set of RECs and carbon credits that entities can access through Xpansiv. This is more crucial for global companies aiming to abate their carbon emissions in countries without compliance markets for RECs.
Xpansiv plans to launch I-REC trading in the 2nd quarter, followed by the integration of the Evident registry.