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Saturday, June 15, 2024

New market listing broadens access to certified emission reduction credits

The UN Climate Change and CBL Markets are partnering to provide wider and easier access to emission reduction credits from projects in developing countries, via CBL’s spot exchange for energy and environmental commodity markets.

Niclas Svenningsen
Niclas Svenningsen, Manager, Global Climate Action, at UN Climate Change

The certified emission reduction credits (CERs) come from projects registered under the UN’s Clean Development Mechanism (CDM). Under the partnership, CBL will integrate with the UN Climate Change CDM Registry to facilitate the listing, purchase and cancellation of CERs alongside other global compliance and voluntary products on its global energy and environmental trading screen, making it one of the first electronic trading venues to list CERs.

“We are happy to work with CBL to make UN certified emission reductions available to a wider group of users,” said Niclas Svenningsen, Manager, Global Climate Action, at UN Climate Change. “Clean Development Mechanism CERs are from emission-reduction projects that contribute to sustainable development. The CBL cooperation thereby offers a win-win solution for users who wish to offset their climate footprint while supporting real emission reductions in developing countries.”

Under the CDM, projects in developing countries earn a saleable credit for each tonne of greenhouse gas they reduce or avoid. The incentive has led to the registration of more than 8,100 projects and programmes in 111 countries – from clean cookstove and water purification projects to wind power and large industrial gases projects – and the issuance of more than 1.9 billion CERs, each equivalent to one tonne of carbon dioxide.

“CBL has been supporting global carbon markets since 2010, bringing innovation, liquidity and transparency to environmental commodity markets,” said Ben Stuart, Managing Director at CBL Markets. “The addition of CERs to our existing global market screen is a reflection of the demand from our clients and market participants.”

For a product which has historically relied on over-the-counter trading, CBL is well positioned to provide a seamless exchange-traded solution to assist participants looking to voluntarily offset CERs, as well as those who have obligations under compliance programmes, such as the Colombian Carbon Tax, the Republic of Korea emissions trading system and potentially CORSIA, Australia-based CBL Markets explained in its announcement.

By listing CERs, CBL expects to promote increased participation, price transparency, and confidence in the broader carbon markets, which play a pivotal role in connecting buyers and sellers to achieve climate mitigation, the company said.

“Given the increasing appetite for CERs across both voluntary and compliance carbon markets, combined with the transparency and price discovery of our exchange, we expect significant demand for CERs via the CBL platform,” said Stuart.

CBL has partnership agreements with environmental registries, financial intermediaries, all major carbon standards and industry associations, which play a safeguard role for the issuance and validity of offsets, the company highlighted in its release.

Established under the Kyoto Protocol, the CDM incentivises investment in emission reduction projects that also contribute to sustainable development. Countries or companies with an emission reduction obligation under the Protocol can use CDM CERs to meet a part of that obligation. CERs are also used for non-compliance purposes. For example, through the Climate Neutral Now initiative companies, organisations, events, schools and even individuals pledge to measure their emissions, reduce what they can and offset the rest with CERs.

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