More institutional capital is flowing into the fast-evolving market for carbon credits. Private equity group Blackstone recently announced its was investing $400m in to Xpansiv, the leading global carbon and environmental commodities exchange platform. Meanwhile fund manager BMO has purchased Radicle Group, a leading carbon offset developer which serves over 4000 clients globally.
According to Bloomberg News, a record $1.4bn poured into climate and carbon-focused startups in the second quarter of this year. The flow of capital is being driven by corporate and government pledges to cut greenhouse gas emissions in the US and around the world.
What are voluntary carbon offset markets?
A key initiative among global efforts to fight climate change, the voluntary carbon offset markets (VCM) allow companies around the world to reduce and remove CO2 emissions over and above what would otherwise be possible. The size of the VCM has grown rapidly in recent years with the value of global voluntary carbon markets nearly quadrupling in 2021 towards $2 billion driven by nearly 500 million offsets traded.
Prices climbed in 2021 by nearly 60% over 2020 to a point not seen since 2013, reaching an annual global weighted average price per ton of $4.00 for all transactions reported by Ecosystem Marketplace respondents, compared with $2.52 in 20206. Looking ahead, the rise in corporate net zero pledges (particularly from firms in carbon intensive sectors) should underpin demand and support expansion in VCMs growth in years to come.
The market is looking for technology-based solutions that can help underpin this growth in demand. One solution is the use of NFT technology to mint carbon credit certificates. Canadian-listed DeepMarkit [TSXV:MKT] is doing just that, via its proprietary MintCarbon.io platform.
DeepMarkit’s overall plan is based on combining the growth of the informal carbon offset market with the maturation of blockchain technology. The chance to make carbon offsets the first tangible asset class to adopt blockchain as its backbone is enticing and valuable.
How does MintCarbon.io work?
By leveraging the secure and transparent blockchain, MintCarbon.io offers a simple onboarding process and other innovations to users in the voluntary carbon market for them to enjoy as a way to access carbon offsets. DeepMarkit’s user-focused service seeks to ensure that carbon offsets that are onboarded are only of the highest quality and have passed rigorous third-party checks.
“Our leading MintCarbon.io platform is secure, easy to use and remains unrivalled in the industry so far,” said Ranjeet Sundher, DeepMarkit’s CEO. “On that basis, and given growing interest in this new asset class, I expect material growth in the number of carbon offsets to be minted into tokens via MintCarbon.io over the next year. “Making it easier for people and companies to access carbon offsets to improve the environment is the ultimate goal.”
DeepMarkit’s wholly owned subsidiary, First Carbon Corp., recently received a Security Assessment Certificate from Quantstamp, Inc. In order to receive the certificate, Quantstamp evaluated and passed security-related issues, code quality and adherence to specifications and best practices related to the MintCarbon.io platform’s smart contracts.
FCC complied with Quantstamp’s iterative audit process to rigorously review and test the MintCarbon.io platform’s blockchain-based smart contracts. Quantstamp performed the security assessment of the platform’s codebase and FCC incorporated feedback and recommendations from Quantstamp to complete the audit and receive the Certificate. All audited smart contracts are now ready to be deployed on the MintCarbon.io platform, the company said today.