Singapore's Climate Impact X to launch new trading platform, nature-based contract

Singapore-based carbon exchange Climate Impact X, or CIX, plans to launch a new spot trading platform called CIX Exchange, and a standardized contract of nature-based carbon credits called CIX Nature X, CIX said in a statement March 23.

The contract will be tradeable on CIX Exchange, when the venue goes live, CIX spokesperson told S&P Global Commodity Insights, adding that the launch of the spot exchange is currently scheduled for Q2 this year.

CIX Nature X is designed to address key market concerns over nature-based projects' delivery risk, standardize and simplify carbon trading procedures for professional buyers, and target to enhance market liquidity and facilitate price discovery, according to the statement.

The CIX is jointly established by DBS Bank, Singapore Exchange, Standard Chartered and Singapore's state investment company Temasek, catering to an international customer base.

Nature X contract offers a basket of carbon credits from 11 REDD+ projects, namely projects that reduce emissions from deforestation and forest degradation through sustainable management of forests and the enhancement of forest carbon stocks, according to the CIX statement.

The 11 projects are all verified under the Verra registry, CIX told S&P Global Commodity Insights. The statement showed the projects are hosted by countries across the Americas, Africa and Asia, collectively accounting for close to two-thirds of all global REDD+ market volumes.

"As the largest single category of voluntary market carbon credits today by volume of credits issued and retired, REDD+ is an essential part of global decarbonization, and will serve long-term as a critical marker for all nature-based credits," Tom Enger, Head of Product at CIX, said in the statement.

Upon its launch, four tradable Nature X contracts will be offered, each representing carbon credit vintages over a fixed period of four years between 2016 and 2022, CIX said. The "vintage" of a carbon credit refers to the year of its issuance.

The minimum sell or purchase volume for standardized contract-based CNX trading is one lot, with each lot being 1,000 mtCO2e, CIX spokesperson told S&P Global.

"A standardized benchmark, with carbon credit prices determined by supply and demand for a named set of projects, will help to boost market liquidity and channel the money needed to fund emissions-reduction projects globally. By bringing together similar high-integrity, nature-based projects, we expect to see a consensus price emerge and a fair value ascertained for these and similar projects," Chris Leeds, Head of Carbon Markets Development, Standard Chartered, said in the statement.

Platts-assessed nature-based avoidance carbon credit was priced at $7.2/mtCO2e March 22, S&P Global data showed.

Table: Projects with carbon credits eligible for delivery into CIX Nature X contract