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Landmark auction of 250 000 tonne blue carbon credits at $27.80 per tonne

Climate Impact X (CIX) is a global exchange for quality voluntary carbon credits headquartered in Singapore that brokered the first major carbon credit auction together with impact-driven carbon finance business Respira early in November 2022. 

The auction sold 250 000 tonnes of high-quality nature-based blue carbon credits with a vintage of 2021 at $27.80 per tonne, roughly at a premium of almost 40% above the current spot prices for credits of a similar vintage. The buyers were mainly from Asia, Europe, and the United States.

Landmark auction of 250 000 tonne-1

Voluntary carbon markets are currently mainly exchange-traded or over-the-counter, but using auctions as a new platform to sell carbon credits will help to scale this market through price transparency and accessibility to quality credits. 

To advance carbon market price transparency, CIX published the auction demand curve displaying the range of bid prices submitted. The curve indicated that 30% of the bid volume was priced at $35 per tonne or more, 27% above the auction reserve price of $27.50 per tonne. This points to the premium that certain buyers are willing to pay for high-quality and unique carbon credits and the increasing demand, therefor, ahead of the 27th UN Climate Change Conference (COP 27).

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The carbon credits were generated from the Delta Blue Carbon Project in Pakistan, the world’s largest mangrove restoration project. This project is protecting and restoring 350 000 hectares of mangrove forests and inter-tidal areas along the southeast coast of Sindh in Pakistan. The project is expected to produce 128 million carbon credits and capture approximately 142 million tonnes of CO2 over its 60-year lifetime and benefit more than 42 000 people in the local communities.

Blue carbon credits are credits generated from projects that conserve and restore blue ecosystems, such as coastal and marine environments that serve as blue carbon sinks. Each carbon credit removes 1 tonne of CO2 from the atmosphere. 

DGB Group focuses on nature-based projects such as reforestation, afforestation, and nature conservation. DGB Group thus generates green carbon credits from the restoration and protection of green ecosystems.

As the world is driving towards a low-carbon economy, businesses and industries are under increasing pressure to decrease their carbon dioxide (CO2) emissions or to become CO2 neutral. Entities that are unable to lower their CO2 emissions sufficiently can compensate for their emissions by purchasing carbon credits to offset their emissions. 

"The price of carbon offsets will triple by 2035." according to Ernst&Young.  Read their report.

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