Singapore’s carbon trading system, AirCorbon, is partnering with Germany’s primary exchange to begin trading carbon offset futures later this year in order to fulfill growing demand from businesses looking to mitigate their greenhouse gas risks.
Trading volume expected to triple this year
The futures contracts will be developed by Deutsche Boerse AG and traded on the European Energy Exchange utilizing the carbon credit market obtained from Singapore’s AirCarbon Pte.
According to Thomas MasMahon, co-founder and CEO of AirCorbon, the new contracts will be in line with the International Civil Aviation Organization’s carbon offset plan to help airlines cut emissions.
Companies use offsets to balance their emissions as they work toward zero or other carbon reduction goals. These companies and investors can use futures contracts to hedge against future price risk on offsets.
The AirCarbon Exchange was founded in 2019 and currently has over 120 active members, with another 200 in various phases of joining. Since its launch, more than 10 million carbon credits have been committed, with around 1 million being exchanged in the previous two months.