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Hong Kong Exchange Launches Voluntary Carbon Market

Hong Kong Exchanges and Clearing Limited (HKEX) announced the launch of Core Climate, a new marketplace for trading voluntary carbon credits and instruments. Core Climate aims to connect capital with climate-related products and opportunities in Asian and international markets.

Demand for carbon offset projects that counteract the release of greenhouse gases and related credits is anticipated to increase significantly over the next several years, as an increasing number of companies and businesses pursue net-zero ambitions and utilize offsets as a bridge to their own absolute emissions reduction efforts, or to balance emissions that are difficult to avoid.

While corporate demand for carbon credits grows, market development confronts obstacles, such as the need for access to capital at scale for the development of new climate projects worldwide and for corporate and investor access to a long-term supply of high-quality carbon credits on the primary market.

Several initiatives have emerged to help scale the development of the carbon credit market, including the London Stock Exchange's launch of the first public markets capital raising solution for the voluntary carbon market earlier this month and Salesforce's introduction of Net Zero Marketplace, a new carbon market built on its eCommerce platform in September.

According to HKEX, users on the new platform can source, store, trade, settle, and retire voluntary carbon credits originating from internationally-certified carbon projects from across the world, such as carbon avoidance, reduction, and removal projects.

Nicolas Agustin, chief executive officer of the HKEX, stated:

"Addressing the climate catastrophe necessitates bold action and substantial regional and global cooperation. Capital markets play a crucial role in finding solutions to this, the most important problem of our generation. As a worldwide East-West super-connector, HKEX is well positioned to establish a thriving, sustainable voluntary carbon market that brings together climate action ideas, capital, and debate."

The HKEX launch follows the exchanges' July establishment of the Hong Kong International Carbon Market Council, a consortium of leading corporations and financial institutions primarily focused on developing an international carbon market and establishing Hong Kong "as a premier carbon hub in Asia and beyond." HKEX stated that it will continue to engage with the council and stakeholders across the climate value chain to investigate climate-related prospects for the long-term improvement of Core Climate.

Co-Head of Markets at HKEX, Glenda So, stated:

"We foresee Core Climate becoming a vital component of our highly interconnected international ecosystem, combining investment capital with new climate technology, projects, and business models. This will expedite the transition to Net Zero and ensure a sustainable future for future generations. I'd like to thank every Hong Kong International Carbon Market Council member for their insightful comments.

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