Hong Kong Exchange and Clearing Limited (HKEX) [0388:HK] started its first voluntary carbon credit trading platform, Core Climate, to support a transition to net-zero emissions, as reported by South China Morning Post on October 28. Core Climate allows participants to source, hold, trade, settle, and retire credits sourced from certificated carbon projects across the world, including carbon avoidance, reduction, and removal projects. All credits listed on the platform will be verified according to international standards such as Verra’s Verified Carbon Standard (VCS), the world’s most widely used voluntary carbon offset verification program. The platform allows settlement in both Hong Kong dollars and Chinese yuan, with no transaction fee charged for now to encourage trading.
HKEX aims to develop Core Climate into an integrated carbon market that meets the needs of participants and project owners across the climate value chain, according to Glenda So, HKEX’s co-head of markets. On the other hand, Core Climate could bridge China and the world in a global transition to a low-carbon economy. Last July, China rolled out the national emission trading scheme (ETS), where over 2,000 companies in the power sector comply with emission limitations by reducing emissions or purchasing emission allowances from other emitters. However, the ETS market is inaccessible to foreign investors and still lacks internationally recognized verification standards. Therefore, Core Climate could contribute to China’s net-zero emissions goal for 2060. Last year, total global transactions in voluntary carbon markets increased by nearly 300% YoY to USD2bn, and the figure is expected to hit USD50bn in 2030.