Launch of carbon trading exchange

ACX (Australian Climate Exchange) has launched the Melbourne-based carbon trading exchange.

ACX's managing director, Tim Hanlin said that the development of the purpose-built emissions trading exchange was undertaken in a joint venture with Australia Pacific Exchange Ltd and has been located in Melbourne to effectively service the business market across Australia.

"The Exchange is the first voluntary carbon offset trading platform in Australia that is backed up and integrated with a comprehensive Offset Registry for Greenhouse Friendly Approved Abatement," Hanlin said.

"ACX has invested a significant amount of resources to develop a platform that will provide businesses with an efficient and transparent mechanism for the transfer of emission reductions, reducing the risk that has been associated with the voluntary market for emissions offsets.

"Companies need to use a system that will stand up to the rigor of external audits, protect against claims of "greenwashing' and unlock potential value for their shareholders, and ACX has now delivered this."

He added that the platform will provide Australia with a clear price signal for carbon there by facilitating both the development of the market for offsets as well as the commercialisation of clean technologies.

The ACX trading platform has initially been developed specifically for transactions in certified, Greenhouse Friendly Approved Abatement.

The minimum "lot' that can be "bid' or "offered' on the Exchange is 100 metric tonnes of carbon dioxide equivalent (CO₂e) of approved abatement. There is no maximum lot; however, Brokers and the trading platform Governor are bound by business rules. Hanlin said that there a number of schemes available in Australia for the accreditation of greenhouse gas emission abatement projects but the preferred instrument of ACX is the federal government's Greenhouse Friendly certification scheme.

"To ensure the integrity of the trading system, ACX has also established an Offset Registry that tracks the transfer of Greenhouse Friendly Approved Abatement from creation through to the retirement of "spent' offsets," he said.

"This provides a transparent and unbroken audit trail of offset custody and ensures there is no double counting of offsets, hence providing a system that is "credible' and "verifiable' for businesses."

Hanlin said ACX has set up the Registry and Exchange specifically to target the business market.

"Our market is the business-to-business voluntary emissions trading market that is characterised by companies with a strong brand image who need to keep pace with the changing demands and expectations of their customers and other key stakeholders," Hanlin said.

Hanlin stated that businesses that come late to the emissions trading market will struggle to acquire capacity to compete effectively in a carbon constrained future.

Any person or entity can buy or sell registered offsets, using the ACX Exchange, through an approved broker that meets the prudential and governance entry standards of the Exchange's business rules.

The Registry is now up and running and can be accessed by the ACX website "” www.climateexchange.com.au.