February 02, 2023

Banks unveil secure carbon market platform

LONDON — There are numerous players in the carbon market space, including a new platform that will be fully operational by the end of 2022.

Carbonplace is a platform created by global financial institutions committed to strengthening the voluntary carbon credit market.

As companies continue to set ambitious climate pledges, the global volunteer carbon market will play a key role in the transition to a net-zero economy.

Carbon credits will direct large-scale investment needed to achieve net zero emissions by 2050 by funding carbon reduction and removal projects.

“However, today’s voluntary carbon market is not equipped to keep pace with the rapidly growing demand for carbon credits,” according to Carbonplace.

“Currently, the voluntary carbon market relies on bilateral trading, which can be slow, opaque and risky, reducing trust in the market.

“The instant, secure and traceable settlement of carbon credit transactions via a secure, distribution network is a linchpin in scaling the voluntary carbon market.”

Last year, Project Carbon — as it was then called — was launched by four major banks, NatWest Group, CIBC, National Australia Bank and Itaú Unibanco.

UBS, Standard Chartered, Sumitomo Mitsui Banking Corporation and BNP Paribas have recently joined the Carbonplace project to help scale and build secure infrastructure.

The goals of collaboration are:

• Increased delivery of high-quality carbon offset projects.

• Create a liquid carbon credit marketplace with price certainty and transparency.

• Develop a strong ecosystem to support the offset market.

• Create tools to help clients manage climate risk.

“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,” said Chris Leeds, head of carbon markets development at Standard Chartered.

“Making connections is at the heart of what we do for our clients, which is why we’re delighted to become a member of Carbonplace. This innovative platform will help create a streamlined and transparent voluntary carbon market for our clients and the industry, which will be critical to helping us all fulfill our sustainability strategies,” added Kevin Arnold, UBS Global Markets co-head distribution.

The voluntary carbon market is growing at a record pace as more and more companies are setting net-zero pledges.

The easiest way for companies to reach those carbon-neutral targets is by purchasing carbon credits from a verified source such as Verra, Gold Standard, Climate Action Reserve and the American Carbon Registry.

Tom Doran

Tom Doran

Field Editor