New Trading Evolution for International Voluntary Carbon Market

Carbon Trade Exchange (CTX) and APX, Inc. (APX), leading voluntary carbon market service providers, have announced their new interface allowing market participants to post offers to sell fully verified, non-activated Verified Carbon Units (VCUs) on the CTX exchange platform via APX’s Environmental Management Account (EMA) and Verified Carbon Standard (VCS) registry. Upon execution of the trade, the non-activated VCUs will be activated and serialized, and instantaneously transferred to the purchaser.

This seamless connectivity to transact non-activated VCUs on a spot basis will allow project developers to list their verified, non-activated credits, with issuance fees electronically deducted simultaneously during the clearance, settlement, and VCU serialization process. This first-of-its-kind technology service provides the transacting parties with instantly delivered, fully issued credits, avoiding an issuance fee outlay until credits are transacted, at which time fees will automatically be deducted from the sale of proceeds.

Advantages of this service offering include increased liquidity, reduced costs to sellers, entry of new market participants, and enhanced project origination as developers attain a faster route to market, and buyers gain access to a broader selection of VCUs. As a result, CTX and APX anticipate a substantial uptake from projects originating VCS credits worldwide.

Wayne Sharpe, CEO of Carbon Trade Exchange, stated: “This exclusive technology is a direct response to market demand, and we are proud to share the credit and partner with APX in delivering innovative solutions for the global carbon markets.” Joe Varnas, CEO of APX, is proud of this deal too. “APX partnered with CTX to create a full service platform enabling market participants to manage and trade multiple environmental commodities with connectivity to multiple carbon registries”.

David Antonioli, CEO of VCS, also has spoken about this. “This new structure gives companies an enhanced platform to access credits from the more than a thousand VCS projects all around the world”.  “As with any growing market, innovation and flexibility are key to expansion, and it is tools just like these that will help market-based solutions continue to offer a practical way forward to the challenges presented by climate change.”

We really hope that this agreement was a great contribution for the fight against the climate change.

 

The carbon market and the German Elections

The celebration of federal elections in Germany the last Sunday is one step more to reach a final position on back-loading, the proposal to delay the auctioning of 900 million allowances under the EU’s Emissions Trading System (EU ETS), the EU’s flagship on climate policy. The current oversupply of allowances in the market is estimated at €2 billion and the EU seems to have finally tuned into the idea that the ETS cannot fix itself and that market intervention is needed. This oversupply has caused the drop of carbon prices.

The position of Germany is seen as crucial, since the country controls the most votes in the Council. Chancellor Angela Merkel’s conservative party has won Germany’s election with absolute majority and now she is going to start the hunt for a reliable coalition partner for a new government. A coalition with the centre-left Social Democrats (SPD) is seen as most likely, but she also wants to negotiate with The Greens.

Chancellor Angela Merkel’s centre-right party (CDU/CSU) has expressed cautious support for back-loading. She has said that although there was opposition to back-loading in Germany, the oversupply in the EU ETS has to be addressed to favor cleaner generation. But the CDU/CSU wants to slow the growth of renewable power.

The key opponent of the back-loading proposal was FDP party, the coalition partner of the governing CDU/CSU until now, but it has failed to reach the 5 percent hurdle to remain in the Bundestag. So, if there is a coalition between CDU/CSU and SPD or The Greens, it is very likely that Germany supports the back-loading measure. The SPD and Merkel’s CDU have also voiced support for raising the EU’s carbon reduction target for 2020 to 30%, up from the current 20%.

Now, we have to wait what EU member states decide. But one thing is clear: the EU ETS has to be fixed.

Rosa Brosé