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CIX to launch nature-based benchmark contract
Market concerns over delivery risk, pricing and fragmented liquidity in VCM addressed
Tom King 23 Mar 2023

Singapore-based Climate Impact X (CIX), a global carbon exchange and marketplace for environmental credits, will launch a nature-based standardized contract in the company’s upcoming spot trading platform, CIX Exchange.

CIX Nature X (Nature X), which will trade under the contract code CNX, aims to address key market concerns over project delivery risk, market-representative pricing and fragmented liquidity in the voluntary carbon market (VCM).

Validated through extensive industry consultation, Nature X will deliver a market-driven price benchmark, with enhanced transparency benefitting the industry at large.

At launch, Nature X represents a curated delivery basket of 11 large, well-established and globally-accepted carbon credit projects that support reducing emissions from deforestation and forest degradation, the conservation and sustainable management of forests, and the enhancement of forest carbon stocks (REDD+).

Combined, these 11 projects from across the Americas, Africa and Asia account for close to two-thirds of all global REDD+ market volumes. At launch, Nature X will contain four tradable contracts, each representing credit vintages over a fixed period of four years between 2016 and 2022.

Each lot of CNX equates to 1,000 carbon credits, where each credit represents one tonne of reduced or avoided carbon dioxide from the verified projects.

Nature X, CIX states, has been curated to be precise enough to ensure confidence and certainty in the project credits delivered, while remaining broad enough for ample liquidity, and to mitigate any potential concentration risk or sudden market or regulatory developments.

“CIX is creating a more fungible spot contract, reducing the risk of buying and selling recently issued credits and, ultimately, enabling more market participants to transact with confidence and accuracy,” shares Julien Hall, the company’s pricing director. “Bids, offers and trades of the Nature X contract by core market participants in a concentrated daily trading session will shine a clear light on market value.

“This nexus of price formation and liquidity underpins a robust and representative nature-based spot benchmark, which should build confidence in fairly-priced project differentials, forward contracting and, ultimately, futures.”

The projects with credits eligible for delivery into Nature X contracts include:

  • Kasigau Corridor REDD Project Phase ll – The Community Ranches, Kenya
  • Rimba Raya Biodiversity Reserve Project, Indonesia
  • Mai Ndombe REDD+ Project, Democratic Republic of the Congo 
  • Cordillera Azul National Park REDD Project, Peru
  • REDD in Tambopata National Reserve and Bahuaja-Sonene National Park, Brazil
  • Envira Amazonia Project – A Tropical Forest Conservation Project in Acre, Brazil
  • Katingan Peatland Restoration and Conservation Project, Indonesia
  • REDD+ Project for Caribbean Guatemala: The Conservation Coast, Guatemala
  • Reduced Emissions from Deforestation and Degradation in Keo Seima Wildlife Sanctuary, Cambodia
  • Southern Cardamom REDD+ Project, Cambodia
  • Rio-Anapu Pacaja REDD Project, Brazil.
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