Plans to launch what is claimed will be the world’s first carbon trading exchange and clearing house in Abu Dhabi have been announced.
International financial centre Abu Dhabi Global Market (ADGM) is partnering with AirCarbon Exchange (ACX) to create the fully-regulated voluntary trading exchange and carbon clearing house, allowing corporates to trade and finance carbon credits like conventional financial assets.
Expected to launch in 2022, ACX will be established as a Recognised Investment Exchange (RIE) and regulated by ADGM.
As a regulated RIE, ACX aims to offer its market participants and customers efficient trading and a regulated transparent price discovery mechanism.
ACX intends to initially use its distributed ledger technology within a traditional commodity trading construct to create tokenised carbon credits for spot trading, followed by plans to offer carbon credit futures as commodity derivatives for trading.
All digital tokens will be custodised by a regulated Recognised Clearing House (RCH), which will be set up by ACX and known as ACX Clearing Corporation.
ACX intends to extend its trading platform offering to include clean energy products, in addition to carbon credits.
Ahmed Jasim Al Zaabi, Chairman of ADGM said: “This is a significant global milestone and another world’s first for Abu Dhabi. This initiative reinforces ADGM’s commitment and ongoing efforts to cement its position as a leading international financial centre and world-class global commodities and carbon trading hub. We are excited to be partnering with ACX to enable and facilitate trading of high-quality carbon credits and in that aspect, encourage more companies to reach their decarbonisation goals.
“As the first country in the Gulf to commit to net zero by 2050, this new trading platform is a further extension of Abu Dhabi’s drive to support sustainability ambitions and underlines ADGM’s focus on carbon neutrality as an international financial centre.”