Abu Dhabi’s renowned international financial center (IFC) and free zone, Abu Dhabi Global Market (ADGM) has entered into a partnership with AirCarbon Exchange (ACX) to establish the world’s first fully regulated carbon trading exchange and carbon clearing house in the emirate.
According to the statement, ADGM will regulate carbon credits and offsets as emission instruments, and issue licenses for exchanges to operate both spot and derivative markets.
The regulatory framework will enable corporates to trade and finance carbon credits like conventional financial assets, thus increasing participation and investment in global carbon reduction and offset programs.
ACX, a global carbon exchange that uses blockchain architecture, will be established as a recognized investment exchange (RIE) and regulated by ADGM. Expected to be launched this year, it will offer market participants a “regulated transparent price discovery mechanism.”
“This is a significant global milestone and another world’s first for Abu Dhabi. This initiative reinforces ADGM’s commitment and ongoing efforts to cement its position as a leading international financial center and world-class global commodities and carbon trading hub. We are excited to be partnering with ACX to enable and facilitate the trading of high-quality carbon credits, and in that aspect, encourage more companies to reach their decarbonization goals. As the first country in the Gulf to commit to net-zero by 2050, this new trading platform is a further extension of Abu Dhabi’s drive to support sustainability ambitions and underlines ADGM’s focus on carbon neutrality as an international financial center.”
Furthermore, ACX intends to set up a regulated Recognized Clearing House (RCH), which will be known as ACX Clearing Corporation, to clear and settle commodities and commodity derivatives.
In January, ACX partnered with the UN Framework Convention on Climate Change (UNFCCC) to promote carbon offsetting via certified emission reductions (CERs) to allow its clients to purchase and retire CERs for their carbon offsetting purposes.
Last year, ACX was recognized as the Best Carbon Exchange in Environmental Finance’s prestigious Voluntary Carbon Market Rankings.