SINGAPORE (Reuters) - Carbon exchange Climate Impact X (CIX) said on Thursday it will launch a nature-based standardised (NBS) contract, whose sale will give buyers credits and proceeds that are intended to be used to help save forests.
NBS credits can be generated through schemes such as planting trees or protecting forests that could be destroyed to make way for development projects if no financial incentive is given to preserve them. Many polluting companies seek to use carbon offsets including NBS credits to compensate for pollution from their operations.
Critics say offsets allow greenhouse gas emitters to continue polluting and don’t materially contribute to reducing emissions.
The contract CIX Nature X will trade under the contract code “CNX” on its spot trading platform, and eligible projects include rainforests and biodiversity reserves in Asia, Africa and South America, Singapore-based CIX said.
CIX is a joint venture between banks DBS and Standard Chartered, Singapore Exchange (SGX Group) and Singapore state investor Temasek Holdings.
“In curating projects for contractual delivery into Nature X, CIX considers the size of a project by volume of issued and unretired credits,” CIX said, adding recognition by market participants and rating agencies were also deciding factors.
Projects eligible for the CNX contract include Kasigau Corridor REDD Project in Kenya, Rimba Raya Biodiversity Reserve Project in Indonesia and the Cordillera Azul National Park REDD Project in Peru.
Each lot of CNX equates to 1,000 carbon credits, where each credit represents one tonne of reduced or avoided carbon dioxide from the verified projects, CIX said.
Reporting by Sudarshan Varadhan; Editing by Jacqueline Wong
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