As companies seek to meet their carbon-neutral goals, the demand for carbon credits is expected to increase. Carbon offset projects aim to offset any carbon emissions firms cannot eliminate or control. And companies buy them in the form of carbon credits.
Several voluntary carbon marketplaces have sprung up recently that allow firms to trade or exchange those credits.
Last year, a coalition of four international banks – Canada’s CIBC, Brazil’s Itau Unibanco, Scotland-based NatWest Group, and National Australia Bank – launched Project Carbon, a voluntary carbon marketplace pilot.
The financial institutions are developing a technological platform to provide settlements infrastructure for carbon marketplaces.
More specifically, the project will help with a smooth delivery of high-quality offset projects, provide a liquid carbon credit marketplace with price transparency, contribute to the ecosystem to support the offset market, and help clients manage climate risk more effectively.
“Tackling climate change is everyone’s job. We’re helping to find solutions and support our customers as they take action to transition to Net-Zero by 2050,” said Victor Dodig, president and chief executive officer at CIBC, Milton Maluhy Filho, CEO at Itaú Unibanco, Ross McEwan, group CEO at National Australia Bank, and Alison Rose, CEO at NatWest Group. “Project Carbon is a terrific example of how technologies such as blockchain can address existing barriers and make carbon offsets more accessible for our customers – as part of their broader plans to reduce overall emissions and achieve their own targets.”
And just recently, three more financial institutions joined the coalition as founding members of the project: UBS, Standard Chartered, and BNP Paribas. The carbon settlement platform, now known as Carbonplace, is expected to be operational by 2022, and it will only be processing carbon credits verified via internationally agreed standards.
“When launched, Carbonplace will give greater transparency on the pricing and material climate impact of carbon credits, and supports corporates and investors to access quality projects as part of their multi-action carbon management strategies,” said Constance Chalchat, CIB head of company engagement & chief sustainability officer at BNP Paribas Global Markets.
Key features of the Carbonplace include a book of record of carbon credit ownership; enhanced price discovery by posting executed trade sizes and prices; promoting transparent demonstration of market demand; full traceability and linkage back to the source of credit; facilitating rapid scaling of client base and provide post-trade settlement. The platform is built on a private Ethereum platform developed with ConsenSys.
“Carbonplace will reduce barriers to entry in the voluntary carbon market, and give project developers in the global south direct access to large numbers of customers looking to fund carbon reduction and removal projects. It builds on the work Standard Chartered has been involved in, in the Taskforce for Scaling the Voluntary Carbon Markets (TSVCM), and ensures that carbon credits on this platform are of the highest-quality,” said Chris Leeds, head of carbon markets development at Standard Chartered, and board member of the ICVCM.
