ABU DHABI, UAE and SINGAPORE and LONDON: AirCarbon Exchange (ACX) hosted the first trades of the newly launched Global Emission Reduction Contract, or GER, which aims to become the global reference price for voluntary carbon markets.
The contract, which was created by Net Zero Markets, went live on ACX on Friday, June 17th, and traded at between $7.23 a tonne to $7.60 a tonne with Bioeconomy, who is led by Dorjee Sun, a TIME Magazine Hero of the Environment, as one of the first buyers. Its current bid/ask range is $7.65-$7.70.
“The world is facing a climate catastrophe, so we need game-changing scale and speed in voluntary carbon markets,” said Dorjee Sun.“Bioeconomy is actively investing and developing large scale carbon projects and market innovations such as the GER. Bioeconomy was proud to be involved from the very outset of the new contract which can derisk and unlock liquidity for all stakeholders. The Net Zero Markets team have launched a great product that I can see quickly becoming the reference price for carbon offsetters.”
The GER has been designed to tackle some of the problems with existing voluntary carbon markets by providing a single price for carbon, akin to the standardization and calibration provided by the European Union Emissions Trading Scheme for compliance markets. By combining the current mixture of standards, jurisdictions, project types and vintages into a single price, via four easy to understand sub-contracts that maintain price differentiation for harder to reach projects such as long-lived removals, the GER will help increase both liquidity and transparency in the often-opaque voluntary sector and make it much easier for corporates as well as small and medium-sized enterprises (SMEs) to offset the carbon emissions they are unable to reduce.
“ACX continues to break new ground in the carbon space,” said William Pazos, Managing Director and Co-Founder of ACX.“The GER is a key innovation in order to streamline carbon trading. It provides a clear price of carbon which will, in turn, unlock investment into climate mitigating activities globally. We are excited to be an integral part of bringing this product to market.”
ACX is the first exchange to host this new contract as well as the four underlying products that the GER is comprised of. The four sub-contracts consist of the:
- Base Carbon Contract, or BCC, which covers the renewables and energy efficiency sector
- Forestry Carbon Contract, or FCC, which encompasses the agricultural, forestry and land use sectors
- Prime Carbon Contract, or PCC, for those projects with additional benefits that meet at least three of the United Nations Sustainable Development Goals.
- Carbon Capture Contract, or CCC, which covers projects that provide long-lived removal of carbon emissions, such as biochar projects.
“We're obviously pleased that the GER was up and trading on its first day and pleasantly surprised by the positive interest that it has generated in such a short space of time,” said Louis Redshaw, CEO of Net Zero Markets.“We've spent two years perfecting the GER and it ticks a lot of boxes for investors as well as the corporates and individuals that it was designed for.”
About AirCarbon Exchange (ACX):
AirCarbon Exchange (ACX) is a global exchange revolutionizing the voluntary carbon market. The exchange's client base comprises corporate entities, financial traders, carbon project developers and other industry stakeholders. ACX provides its clients with an efficient and transparent trading platform which is easy to use, frictionless and with the lowest commission fees available on the market. Its underlying technology will allow the carbon market to scale efficiently to meet global Net Zero ambitions.
As of May 2021, ACX became the world's first carbon negative exchange, having offset its carbon emissions 12 months into the future (to May 2022) through the Onil Stoves Guatemala Uspantan project. ACX is committed to continuing to offset all of its emissions 12 months forward. In 2022, ACX was named as the 'Best Solution in Energy Trading' by Wired UK and Publicis Sapient at their Global EnergyTech Awards, which spotlighted the companies that are 'Winning the Race to Reinvent Energy'.
About Net Zero Markets:
Net Zero Markets is a company dedicated to developing risk management tools, products and contracts in the global environmental space. Its benchmark Global Emission Reduction product will deliver the level of transparency and commoditisation needed for voluntary carbon markets to flourish, thereby allowing more finance to flow to the projects that are needed to achieve net zero targets.
The company is led by Louis Redshaw, one of the founding figures of the global Carbon Markets. In 2006, he created a standard for trading Certified Emission Reduction (CER) carbon offsets that was adopted by all major market participants and the carbon exchanges. This initiative allowed a secondary trading market in CERs to take-off thanks to the establishment of liquidity and price transparency.
Complementing Louis's deep knowledge and understanding of carbon markets, the wider team has a wealth of experience innovating and growing markets, with an emphasis on carbon and energy trading and risk management.
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