New trading platform promises to shake up voluntary carbon market

Greenwise Staff

8th June 2010

A new trading platform has launched that is promising to shake up the voluntary carbon market by allowing companies of all sizes to carbon offset in a fast, transparent and efficient online exchange.

Carbon Trade Exchange (CTX) describes itself as the world's first global spot electronic exchange for voluntary carbon credits. Its founder is Wayne Sharpe, who set up Bartercard, the world’s largest non cash credit unit exchange.

CTX claims to address the needs of small to medium-sized enterprises (SMEs) looking to offset their carbon emissions using Voluntary Emission Reductions (VERs). It also promises to bring transparency to the voluntary carbon market, which has long been the target of criticism because it is unregulated, unlike the UN’s Clean Development Mechanism (CDM) and the European Union’s Emissions Trading Scheme.

Individuals and organisations wanting to offset their carbon footprint can purchase VERs. VERs are carbon credits developed by carbon offset providers which are not certified. They fund projects that fall outside regulated markets such as the CDM.

The voluntary carbon market has matured in recent years, but the price of voluntary credits varies widely, as does the quality of projects and methods of emissions reduction used. There is also a question mark over how effective voluntary credits are at actually reducing emissions, because many credits transacted are not taken off the market, or retired.

Last year, the UK Government excluded voluntary offsets from its new quality assurance initiative, which identifies quality offsets.

However, voluntary credits are a multi-million pound business and CTX says its unique electronic interface with the Markit Environmental Registry, a global registry of environmental credits, allows instantaneous transfer of ownership of primary voluntary credits with no possibility of 'double selling'.

CTX also says that its spot trading exchange avoids over the counter (OTC) trades, which it describes as "expensive" and "cumbersome" and not suited to the SME market.

"Buyers now have the ability to search by product, standard, project type, continent and location; then sort their search by price or best match to their requirements. A purchase can be completed in seconds – a process that can take weeks or months OTC," CTX said in a statement.