Climate Impact X
The challenge
The market for voluntary carbon credits is historically surrounded by questions around quality, risk, availability, and pricing. By placing a strong emphasis on quality, working with key partners, and harnessing technology to evaluate and monitor projects, CIX provides reassurance to their community of buyers and supports their suppliers in earning fair value for their projects. By combining quality, assurance and liquidity, CIX helps corporates take practical action in their decarbonisation journeys.
In 2021, CIX was a newly founded company backed by major financial institutions in Singapore, including DBS Bank, Singapore Exchange (SGX), Standard Chartered and Temasek. As their vision for the online trading platform was still emerging, CIX was looking for a credible and experienced technology partner, to build their envisioned platform from the ground up.
The platform needed to have the capability for carbon credit suppliers to list their projects with sufficiently detailed information from a range of data sources, including Project Registry certification data, Sustainability Development Goals and 3rd party insights; as well as the ability for CIX to supplement and complement this data with relevant commentary and images using a Content Management System (CMS). To ensure credibility around settlement and payments, the platform needed to be integrated with DBS Bank, in the process complying with Monetary Authority of Singapore (MAS) IT cybersecurity standards. The platform also needed to be highly accessible for buyers that are new to the voluntary carbon credit market, with an intuitive, B2C grade user interface and at-a-glance comparison tools. As the voluntary carbon market is still nascent, the platform also needed to support price discovery.
As a result, CIX required both a Project Marketplace and an Auction Platform to facilitate price discovery through auction, whilst allowing suppliers to trade based on discovered price on the Project Marketplace.
As CIX was due to launch to the wider public at COP26 in November 2021, they also needed a short-term proof-of-concept of the auction platform, to run an actual auction in celebration of the event, in addition to an auction platform to supplement their marketplace.
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The solution
In the Summer of 2021, CIX reached out to NovaFori to inquire if such a feat was possible. Building on top of NovaFori’s existing auction software and collaborating closely to understand the market traits, together we were able to hold the world’s first auction for carbon credits in October 2021, well in time for CIX’s official launch at COP26. The auction attracted 19 global buyers across various industries, with 170,000 tonnes of carbon credits transacted as part of a curated portfolio of eight natural climate solution (NCS) projects.
Meanwhile the envisioned platform was designed and brought to life. To ensure high accessibility as well as to support price discovery, a combined model was developed. On the platform, carbon credits can be traded in a click-and-buy fashion with predetermined prices, as well as being traded at auction for price discovery.
The Project Marketplace (click-and-buy) is a digital platform for businesses and carbon project suppliers to list, discover, compare, buy and retire quality carbon credits. It offers robust information on projects, along with third-party ratings and satellite monitoring to facilitate the growing interest, and create greater trust, in the voluntary carbon market (VCM).
The Auction platform gives both buyers and sellers the opportunity to participate in price discovery for carbon credits. One or multiple projects and vintages can be sold as a portfolio at auction, providing sellers the opportunity to create a package deal for a variety of credits. Credits at auction can be sold to a multitude of winning buyers. Each winning buyer obtains credits from each of the projects and vintages listed in the portfolio, in a predefined ratio. Stringent auction rules ensure fair play and correct distribution.
The initial launch as well as future growth of the platform are supported by detailed behavioural and transactional data insights, presented to decision makers in accessible dashboards. Examples of such insights include changes in user activity, volatility in offering and pricing, and conversion funnel flow. This has helped driving strategic decisions in the first weeks after go-live, and will continue to do so as the platform grows.
The result
The result is a unique carbon credit trading platform, which boosts the high quality of carefully selected suppliers, as well as liquidity through high accessibility for buyers.
- Multiple trading mechanisms (Fixed Price, Sealed Tender Capacity Auction)
- API Integrations with 3rd party data providers
- Content Management System (CMS)
- Integration with inventory management system and payment processing services
- Mobile-ready
