Dubai: ACX (AirCarbon Exchange) announced on Wednesday the launch of ACX Abu Dhabi, its exchange and clearing house in Abu Dhabi Global Market (ADGM). The platform has already conducted significant trades, signifying the initiation of the voluntary carbon markets (VCM) within this market.
ACX established its regional presence in ADGM in August 2021, with the support of Hub71, Abu Dhabi’s global tech ecosystem. In September 2022, Mubadala made a strategic investment in ACX as part of its economic diversification objectives and commitment to responsible investing.
ADGM, an international financial center in the capital of the UAE, has established itself as a financial free zone. In September 2022, it became the first jurisdiction to regulate voluntary carbon credits as financial instruments. This achievement was made possible through the introduction of an Environmental Instrument classification, which created a regulatory framework for licensing exchanges and clearing houses for both spot and derivatives markets related to these products.
ACX’s Co-Founder and Co-CEO, William Pazos, stated, “This represents another significant milestone in bringing carbon credits closer to the world of regulated commodities. ACX takes pride in being the world’s first fully regulated spot carbon environmental exchange and clearing house.”
In November 2022, ACX Abu Dhabi became the world’s first regulated Recognised Investment Exchange and Recognised Clearing House to receive a license under a capital markets regulatory framework. This license allows ACX to offer Environmental Instruments in the form of carbon credits, ensuring fair and orderly trading, real-time market surveillance, and market integrity, transparency, and efficient price discovery. ACX strictly adheres to client asset segregation, regulatory capital, and audit requirements, providing investors with trust and security. This milestone marks a significant step towards a thriving market for voluntary carbon markets, as ACX creates a foundation for VCM participants to trade carbon credits and environmental instruments. The first trade of carbon credits on this fully regulated exchange occurred between First Abu Dhabi Bank (FAB) and Helix Climate, with the UAE’s largest bank expressing its support for the expansion and potential of carbon markets. ACX Abu Dhabi also introduced the first trade on its Carbon Market Board (CMB), an electronic trading facility facilitating over-the-counter transactions, completed with South Pole, a leading climate project developer and solutions provider.