Xpansiv CBL Holding Group Ltd., which gives U.S. hydrocarbon producers the ability to trade their environmental, social and governance credentials as an asset class, hopes to break into the metals and mining space after completing a US$40 million pre-IPO raise ahead of its ASX listing planned for 2021.

The private Australian company was formed in August 2019 through the merger of Sydney, Australia-based commodity spot exchange CBL Markets and San Francisco-based, ESG-related commodities platform Xpansiv. Most of the company's work so far has been related to the U.S. oil and gas sector.

Oil and gas major BP p.l.c. subsidiary BP Ventures is a significant investor in the group. S&P Global and Macquarie Group are also investors in Xpansiv, which announced the oversubscribed pre-IPO raise on Jan. 14. According to industry sources, the IPO is expected to value the company at A$500 million.

Xpansiv CBL's products include renewable energy certificates, or RECs, carbon offsets, and differentiated fuels, which can help companies meet voluntary and compliance-based ESG goals.

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CBL co-founder Ben Stuart told S&P Global Market Intelligence that the company is already in talks with major mining companies through to juniors, as there is high demand for accountability on fugitive emissions.

Stuart said the company's platforms are as relevant to the metals and mining industry as they are to oil and gas, highlighting plans by the London Metal Exchange to launch a spot trading platform for low-carbon aluminum in 2021 and the mining industry's increasing focus on ESG standards.

Just as Xpansiv gives gas producers the ability to create a certificate granting them credibility around the production attributes of the gas, such as low methane emissions, which would generate more certificates, so too could miners "effectively get paid" for having low fugitive emissions in their processes.

Both CBL and Xpansiv's water exchange H2OX set volume records in 2020 with strong growth in carbon, RECs and water, as more companies committed to net-zero goals, including airlines devastated by the pandemic. H2OX covers the electronic trading of water entitlements and allocations.

CBL traded a total of 31.37 million tonnes of carbon in 2020, increasing 217% year over year, it said in a recent 2020 review. "We see these carbon commitments expanding in 2021, encompassing measurable offsets and differentiated fuels valued according to environmental impact," CBL said in the annual review.

In October 2020, CBL also launched the Global Emissions Offset product, a standardized carbon offset contract enabling companies to buy offsets at a neutral consensus price. It also helps to facilitate "green finance" and increases the risk-management ability of the market, the company said.

Stuart said mining suppliers have shown particular interest in this type of offset.

In August 2020, Xpansiv started providing daily and weekly spot pricing for U.S. RECs and carbon offsets markets, which Stuart said would be useful for all markets as they "try to understand their carbon footprint and how to decrease it."