One article to understand: The top four carbon exchanges in the world in 2023

The earth's temperature continues to rise, heat waves are sweeping across Europe and Taiwan, and news such as forest fires have dominated international news headlines. "Reducing carbon emissions" has become a new trend for individuals, business organizations and even countries, and "carbon exchanges" have begun to appear continuously in recent years.

A new generation of credit lines: CO2e


People (or organizations) who cause pollution can purchase "carbon rights" to offset the emissions they release into the air. Each credit is equal to "one ton of carbon dioxide equivalent (CO2e)". In other words, when an individual purchases a carbon credit, it can offset one ton of its own carbon dioxide emissions.

What is carbon trading? What is carbon offset? Carbon trading is the process of buying and selling carbon credits with the goal of reducing carbon dioxide emissions that contribute to global warming, and carbon exchanges are the vehicle for this mission. And carbon offsets represent the actual removal of carbon dioxide from the atmosphere. This removal can be achieved in a variety of ways, such as planting trees, capturing it directly from the emission source, or capturing it in the atmosphere. People with projects that remove some of their carbon emissions can sell those CO2 reductions as carbon credits.


Compliance carbon market VS voluntary carbon market exchange


Before discussing the carbon exchange, we will first mention the "compliance carbon market" and "Voluntary Carbon Market Exchange VCM, Voluntary Carbon Market" - the "compliance carbon market" mostly originates from national development or the "compliance carbon market" of U.S. state governments. Regulations that mandate the reduction of emissions", examples include the European Union's Emissions Trading System (EU ETS) or California's cap-and-trade scheme in the United States, where the government assigns maximum emission limits to each company. Emitters can then buy or sell carbon rights based on the emissions they produce and their allowance limits.

In contrast, voluntary carbon markets (VCM) operate without government regulation. However, it has exploded in recent years as the Paris Agreement calls on businesses to achieve strict net zero targets.

In the Voluntary Carbon Market (VCM) exchange, individuals and companies can purchase carbon rights to offset the carbon dioxide emissions they release. Many carbon rights buyers and sellers are now trading through digital carbon exchanges, including many. Few people prefer to use blockchain technology to conduct carbon token transactions.
 


 2022 TOP 4 Carbon Exchanges


In Europe and the United States, there have long been companies or individuals who have purchased carbon rights directly from developers who sell them. Now, there are more carbon rights buyers and sellers conducting "carbon token transactions" through blockchain technology. Although there is currently no unified global carbon trading market, trading plans and various trading platforms have been launched in several regional markets. Let’s take a look at the “TOP 4 Carbon Exchanges in 2022” compiled by the carboncredits.com website.

 

/ 1 /
The simplest and most efficient ACX - AirCarbon Exchange  

 


Launched in Singapore in 2019, it is mainly used as a digital trading platform for airlines to trade carbon credits. More than 62% of its customers are from Singapore and Southeast Asia.


/ main features/ 
 

1. Already has a customer base of more than 130 enterprises.

2. Use decentralized ledger technology (DLT). It also leverages the latest blockchain technology to create secure carbon credits. Leveraging the speed and efficiency of blockchain technology, one of its goals is to achieve zero-day trade execution, clearing and settlement.

3. Focus its DLT transactions on the aviation industry through CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation).

4. The trading functions of bidding and selling are similar to the trading of financial commodities, with price transparency.

5. Won the honor of Best Carbon Exchange in Environmental Finance’s 2021 VCM rankings.
 


/ 2 /
The spot exchange with the highest CP value is CTX Carbon Trade exchange

 


The launch date can be traced back to 2009, with the first transaction in 2017. Its carbon rights trading accepts four currencies: British pounds, Australian dollars, US dollars and euros.


/ main features/ 
 

1. CTX is a membership-based spot exchange with quite a few participants, ranging from individuals, brokers and project developers to large enterprises. Their carbon credits can be listed on CTX directly from their account and then traded digitally from anywhere.

2. CTX allows trading credits from a variety of different industry standards, including Gold Standard, Verra’s VCS, and the United Nations Framework Convention on Climate Change (UNFCCC). Starting in April 2022, CTX will also add BioCarbon Registry.


3. Allow credit transactions of different industry standards, including: Voluntary Emission Reduction (VER) Certified Emission Reduction (CER) Certified Carbon Units (Verified Carbon Units; VCU) EU emissions Quota (European Union Allowance; EUA) European Aviation Allowance (EUAA) In addition to promoting carbon trading, CTX also provides: carbon footprint calculation, carbon offset and carbon project development and other services.

4. Buyers can purchase and write off a minimum of 100 tons of CO2e credits, while other carbon exchanges must trade at least 1,000 tons of CO2e credits. 5. CTX has traded hundreds of millions of tons of CO2e offsets, and the two largest trading

volumes The credits are Verra's certified carbon credits and CTX's CERs.
 


/ 3 /
The most liquid C2C (Carbon-to-Crypto) carbon exchange: Toucan Protocol

 


 

Named after the tropical toucan  Toucan  , a non-profit organization from Switzerland, it is one of the promising climate cryptocurrencies.


 / main features/ 
 

1. Toucan Protocol builds the infrastructure for carbon markets to fund solutions to the climate crisis. The mission is to make DeFi (decentralized finance) work by introducing a new currency, writable carbon.
It converts Certified Carbon Units (VCU) into cryptocurrency through its proprietary Toucan Bridge.

2. Toucan creates its own carbon pool. Carbon offsets can be converted into more liquid carbon index tokens, giving buyers exposure to different classes of carbon asset prices. is the first universal bridge to tokenize carbon credits, allowing anyone to tokenize their carbon offsets and make them available for use in the DeFi world.

3. Toucan has successfully linked more than 17 million emission certificates to the blockchain. It enables users to link their emission certificates to the network’s virtual currency. It means converting the "non-fungible carbon tokens" of other carbon credit certification institutions into the homogeneous token "Basic Carbon Ton" (BCT).

 

However, the initial average price of Toucan BCT was US$8, but by August 2022, it had dropped to an average of US$1.9~2.
 


/4/

The smartest ESG commodity exchange - Xpansiv

 


Headquartered in the United States, it cooperated with the Australian platform CBL in 2019. Its main customers are large organizations such as airlines and financial institutions.


 / main features /
 

1. It is currently the world’s largest ESG commodity spot exchange: including carbon, renewable energy certificates and digital natural gas.

2. International exchanges for trading various data-driven and ESG-containing commodities. The exchange prices carbon, energy and water-related trades, and the company uses deeper data to do so in an intuitive, user-friendly environment.

3. Xpansiv is currently the market leader, hosting approximately 90% of the world’s voluntary carbon credit transactions. The flagship offset contracts launched all provide high-quality carbon credits. They have cooperated with their partner Chicago Mercantile Exchange (CME) to launch the following three offset contracts:

CBL GEO (Global Emissions Offset): Global Carbon Emissions Offset
CBL N-GEO (Nature-Based Global Emission Offset): Protection Natural Global Emission Offset
CBL C-GEO (Core Global Emission Offset): Core Global Emission Offset


4. There are more than 400 participants in Xpansiv’s CBL trading platform. Its transparent order details enable these participants to see immediate pricing and also enables full market depth for individual carbon offset projects.

5. Xpansiv also took the lead in launching CBL GEO and CBL N-GEO futures contracts in cooperation with CME Group. In December last year, the total trading volume of these futures contracts exceeded 47.1 million tons. This is why Xpansiv has become a quite leading exchange.