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Singapore exchange primes for major auction of nature-based carbon credits
Climate Impact X, Respira to offer access to 600,000 tonnes of carbon credits from three key projects
Tom King 15 Jun 2022

Carbon credit exchange Climate Impact X (CIX) is collaborating with Respira International, a carbon finance business, to hold a major auction of nature-based carbon credits.

The auction will offer access to 600,000 tonnes of voluntary carbon credits from three key projects in Respira’s portfolio via an interactive and transparent bidding process supporting competitive price discovery. The projects include the world’s largest blue carbon project in Pakistan (Delta Blue Carbon), the world’s largest soil carbon project in Kenya (Northern Kenya Rangelands), and a forest conservation project in Sierra Leone (Gola Rainforest Conservation).

Combined, the three projects will protect and restore more than 2.4 million hectares of natural ecosystems – with Delta Blue Carbon alone expected to produce 128 million carbon credits over its 60-year lifetime and sequester 142 million tonnes of carbon from the atmosphere.

As well as protecting 68 threatened species, the projects will directly benefit about a quarter of a million (242,000) people from the surrounding local communities through the creation of new jobs and additional income opportunities.

Nature-based solutions – projects that protect and restore natural ecosystems like forests, mangroves and coastal habitats – can support up to one-third of the required mitigation for a below 2°C pathway by 2030, CIX says, citing the World Business Council for Sustainable Development’s Natural Climate Solutions Alliance. Yet, financing for such projects remains small compared to the estimated US$10-100 billion required to realize their true mitigation potential.

Essential mechanism

Commenting on the auction, CIX chief executive officer Mikkel Larsen says: “Our collaboration with Respira will bring high-quality nature-based carbon credits, which are an essential existing mechanism that is one part of the solution to our climate crisis.”

Singapore-based CIX was jointly established by DBS Bank, Singapore Exchange (SGX), Standard Chartered and Temasek, and is a global marketplace and exchange for quality carbon credits.

In November 2021, CIX completed a pilot auction which cleared 170,000 carbon credits from a curated portfolio of eight recognized nature-based projects. The projects collectively support more than 55,000 jobs, improve education for more than 35,000 students, help fund 60 medical facilities and infrastructure projects, and support efforts to protect over 250 threatened species.

By the end of 2022, the exchange hopes to enable two-way spot trading of quality credits through standardized contracts on a spot platform, hosting liquid contracts and providing the market with clearer price transparency and risk management solutions.

The latest auction will take place in the third quarter of 2022, with specific dates to be announced soon. In addition to delivering positive climate impacts, the three projects are seen driving biodiversity, providing social and economic benefits to communities, and further advancing the United Nations’ Sustainable Development Goals.

Three projects

The Pakistan Delta Blue Carbon is the world’s largest blue carbon project. It aims to protect and restore 350,000 hectares of tidal river channels and creeks, low-lying sandy islands, mangrove forests and inter-tidal areas on the southeast coast of Sindh in Pakistan.

The project has created 1,000 jobs, of which 40% are for women, and it provides 500 people with clean drinking water daily. The auction will be Delta’s first project issuance.

The Gola Rainforest Conservation Project conserves 70,000 hectares of the highly threatened Gola Rainforest National Park in Sierra Leone, one of the world’s most important biodiversity hotspots.

The project is designed to achieve an average of 500,000 tonnes of carbon dioxide equivalent in emissions reduction per year. It also directly benefits 24,000 people in 122 different communities and protects 68 threatened species, including the endangered Western Chimpanzee.

Northern Kenya Rangelands is the world’s largest soil carbon project. Managed by the Northern Rangelands Trust, it is restoring grassland throughout almost 2 million hectares of community-managed rangeland under improved grazing practices in northern Kenya.

The project is expected to remove 50 million tonnes of CO2 from the atmosphere over its 30-year lifetime, and positively impact about 175,000 people. About 70% of its revenues will be paid to local communities.

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