The Future of Crbon Reduction : Air Carbon Exchange

How Air Carbon Exchange Simply And Effectively Streamlines Carbon Trading

AirCarbon Exchange (ACX) is a global digital exchange that supports the voluntary carbon market using a patented digital architecture based on commodities trading. The platform enables consistent and transparent pricing of carbon credits through standardized contracts and blockchain capabilities.

AirCarbon Exchange supports the voluntary carbon market with a patented digital architecture based on commodities trading.

The future of the carbon credit market is powered by the global digital exchange known as AirCarbon Exchange (ACX). The platform is so powerful and efficient that it changes everything about owning carbon credits. Through the groundbreaking use of standardized contracts and the blockchain’s capabilities, all assets can be priced consistently and transparently, ushering in a new era of transparency.

In 2019, Enterprise Singapore, a government agency dedicated to innovation and business development, approached AirCarbon Exchange (ACX) co-founders Thomas McMahon (CEO) and William A. Pazos (Managing Director) about starting a digital carbon exchange in Singapore.

Initially, the team’s sights were set on the expanding carbon offset reduction scheme for international aviation (CORSIA) subset of the voluntary carbon market. However, they quickly broadened their focus after realizing there was a much larger opportunity beyond carbon offsets for international aviation. The problems the group saw in the CORSIA market were also present in the broader voluntary carbon market. First, carbon credit transactions are dominated by financial intermediaries, who charge substantial transaction fees to both parties (often 20%–30%). Two, many carbon credit exchanges use dated technology, such as providing just rudimentary bulletin boards to promote carbon credit projects. In order to promote, market, and sell projects, sellers and buyers of carbon credits must navigate a maze of marketing and administrative tasks, making the system inefficient.

ACX introduces a custom-developed and unique digital architecture supporting a traditional commodities-based architecture to the voluntary carbon market. The company offers pricing benchmarks for ACX’s standardized carbon contracts by looking to the markets for inspiration from other commodities. Carbon credits, which are essentially serial numbers, are a natural fit for the distributed ledger technology (DLT) that supports its platform.

Trading can also benefit from DLT because of the speed with which transactions can be settled. In addition to these benefits, you also get efficient trading, protection against settlement risks, and clear pricing. Because of this, ACX has signed up customers in 32 different countries; these customers include both individual people and large institutions like trading firms, hedge funds, and family offices.

Environmental Finance’s Voluntary Carbon Market Rankings are the largest and most highly regarded assessment of the global voluntary carbon market, and for two years in a row, in 2021 and 2022, The Best Carbon Exchange in the World award has gone to ACX. Although ACX has no plans to become a consumer-facing exchange, it is opening offices in Brazil, Canada, and other countries in partnership with other businesses. Meanwhile, in a future Series B round, the company hopes to raise $50 million.

With permission from the author, this piece was originally published on Lucidity Insights and is now being republished by Entrepreneur Middle East.

Video 01: How AirCarbon Exchange Simply And Effectively Streamlines Carbon Trading