Africa largest exchange firm moves to tap continent’s carbon market
Johannesburg Stock Exchange Ltd, the operator of Africa's largest stock and bond exchanges, has entered the emerging carbon market on the continent. In partnership with Xpansiv, a provider of infrastructure for trading environmental commodities, the Johannesburg-based company has launched a voluntary market for carbon credits and renewable energy certificates.
This move reflects a growing focus on environmental sustainability and carbon trading in financial markets as the world seeks to address climate change and reduce carbon emissions. This sustainability initiative will allow local participants to buy or sell carbon credits and renewable energy certificates that are held in either local or global registries.
Customers will be able to advance their sustainability goals as they will have full access to the functionality of the global Xpansiv platform for spot trading, auctions, or requests for quotes for both carbon offsets and renewable energy certificates.
Key Takeaways
South Africa is the twelfth-highest emitter of carbon globally and has an increasing need for access to and supply of carbon credits. A South African voluntary carbon market will accelerate the creation of carbon offset projects, help meet the demand for credits by emitters seeking to offset their emissions, increase investment interest in the country, and contribute meaningfully to helping grow the economy and improve sustainability practices. The growth of voluntary carbon markets has been significant, and Africa's carbon credits have been steadily increasing. According to the Atlantic Council, voluntary carbon markets increased four times from 2020 to 2022 surpassing two billion dollars in value – and African credits have seen an average growth of 36% on average over the last five years. This market aims to position South Africa as a contributor to decarbonization and foster economic growth while addressing carbon emissions in the country, which ranks twelfth globally as a carbon emitter.
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