By Staff Writer
Blockchain has been touted as a potentially powerful tool in sustainable development and in mitigating the effects of climate change both in Asia and at the global level (see here and here).
A Singapore firm has now launched carbon exchange powered by blockchain, offering a marketplace for airlines and other corporate buyers to trade tokenized carbon emissions, according to reports.
The latest development could help Singapore become a hub for carbon trading representing trades over $100bn, experts believe.
The AirCarbon Exchange, by Singapore-based company AirCarbon, will provide a ready supply of credits called eligible emission units (EEUs) for those in the transportation industry to acquire carbon dioxide (CO2) offsets for compliance and voluntary purposes.
The commercial aviation industry accounts for more than 2.5% of total CO2 emissions, AirCarbon said. The demand for carbon trading is expected to rise with the onset of global regulations and growing awareness towards sustainability, especially amongst institutional investors worldwide.
Mr Edwin Khew, Seas’ chairman and AirCarbon’s chairman and co-founder, was quoted as saying in the Straits Times: “We aim to make the AirCarbon token the easiest and most streamlined instrument for the trading of Corsia EEUs globally.”
These credits are approved by the International Civil Aviation Organisation’s carbon offsetting and reduction scheme for international aviation (Corsia).
AirCarbon is applying for the recognised market operator licence (RMO) and aims for the exchange to be fully operational next year.
The carbon credits will be securitised into tokens using blockchain technology, making them highly liquid, fungible and tradable, said AirCarbon.
Each tradable token is backed by one equivalent tonne of Corsia-compliant carbon credits. The exchange is a collaboration with the Sustainable Energy Association of Singapore (Seas) and supported by Enterprise Singapore.
