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The Johannesburg Stock Exchange (JSE) has introduced the JSE Ventures Carbon Market, a new trading platform developed in partnership with Xpansiv. This initiative allows local stakeholders to trade carbon credits and renewable energy certificates (RECs) stored in local or global registries. It marks a significant step in stepping up South Africa’s nature conservation efforts, offering tools for mitigating carbon emissions.
Landscape view of Blyde River Canyon in Mpumalanga, South Africa.
Carbon credits, representing a reduction or removal of one metric tonne of carbon dioxide emissions, are tradable certificates used by companies to offset their carbon emissions when operational changes for reduction aren't feasible. They are used to offset hard-to-abate emissions and are generated from emission-reducing projects like reforestation and renewable energy. These credits serve as a vital mechanism for companies to reduce their carbon footprint and make a positive environmental impact.
In South Africa, the government permits companies to offset emissions through these credits for tax purposes when emission reduction isn't viable. The JSE Ventures Carbon Market facilitates these trades, allowing companies to engage in the carbon credit market.
Distinguishing themselves from carbon credits, RECs aid in reducing an organisation's Scope 2 emissions related to purchased electricity. RECs are an emerging trend in carbon trading, especially as the National Treasury seeks additional tax sources and incorporates Environmental, Social, and Governance (ESG) targets into corporate regulations. Trustworthiness is key for the success of the market in driving long-lasting decarbonisation efforts.
South Africa and Africa, in general, face greater demand for credits than supply. Despite a favourable position for carbon projects in Africa, regulatory and cost uncertainties can pose challenges for developers. Experts at ENS, Africa’s largest law firm, emphasise the importance of credible market infrastructure and clarity in corporate claims after acquiring carbon credits to avoid the risk of greenwashing in their decarbonisation strategies.
DGB Group supports transparent, robust carbon markets, and in our activity, we emphasise collaboration with stakeholders, including governments and local communities. Our nature-based initiatives across Africa and globally meet stringent industry standards and yield top-quality carbon credits. These initiatives stand out for their exceptional quality and benefits, leaving a lasting impact on the environment. They revitalise ecosystems, bolster ecological resilience, and foster a harmonious relationship between humanity and nature.
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