South African carbon market on the stock exchange
The Johannesburg Stock Exchange (JSE) hosts a carbon market in collaboration with infrastructure provider Xpansiv, under a separate legal entity called JSE Ventures
The Johannesburg Stock Exchange (JSE)in 2023 launched a carbon market in collaboration with infrastructure provider Xpansiv, under a separate legal entity called JSE Ventures.
This initiative allows local participants on the South African stock exchange to buy or sell carbon credits and renewable energy certificates (RECs) that are held in either local or global currencies.
A carbon credit is a tradeable certificate that represents the rights of the holder to emit one ton of carbon dioxide or greenhouse gas equivalent.
Customers are given access to the functionality of the global Xpansiv platform for spot trading, auctions or requests for quotes for carbon offsets and RECs.
According to US think tank Atlantic Council, voluntary carbon markets increased four times from 2020 to 2022, surpassing two billion dollars in value while African credits grew 36% on average between 2018 and 2023.
African countries launched the Africa Carbon Markets Initiatives at COP27 in 2022, to produce 300 million carbon credits annually.
South Africa needs carbon market to stimulate much-needed decarbonisation
Leila Fourie, JSE Group CEO said at the time that the world is witnessing a heightened focus on carbon markets: “We saw this as an opportunity to bring an innovative solution to our market participants while positioning South Africa as a significant contributor to decarbonisation.”
South Africa is the world’s 12th highest emitter of carbon emissions and has an increasing need to access and supply carbon credits. A SA voluntary carbon market will hopefully accelerate the creation of carbon offset projects; help meet the demand of credit by emitters who want to offset their carbon emissions; increase investment interest in the country; and contribute to the growth of the country’s economy.
“This initiative is suited to market participants that have identified clear sustainability commitments, particularly towards net-zero. We look forward to engaging with them on the platform’s range of environmental offerings.
“Our aim is to promote transparency in an evolving landscape for environmental investment. We hope to do this while expediting potential funding mechanisms for these projects,” said Fourie.
Formed in 2016, Xpansiv provides environmental market technology including registry infrastructure, market data and portfolio management platforms.
John Melby, Xpansiv CEO said they are looking forward to working with the JSE team to “promptly deliver a world-class carbon and renewable energy marketplace in Africa and to enable new regional productions and initiatives to thrive as the continent steps up its global climate ambitions.”
Cover photo: maxxasatori©123rf
