HKEX celebrates 4 weeks of trading on Core Climate

HKEX celebrates 4 weeks of trading on Core Climate

Electronic boards display various stock prices at Exchange Square in Hong Kong on March 9, 2020. ISAAC LAWRENCE AFP Hong Kong Exchanges and Clearing HKEX celebrated its first four weeks of trading on Core Climate - Hong Kong's new international carbon marketplace on Thursday in a gong-strike ceremony on Thursday as it planned to further enhance the trading platform.

Since the platform launched on Oct 28, it has recorded more than 40 trades through Nov 24, completed by 20 corporate entities, representing a total volume of around 400,000 metric tons of carbon credits, according to HKEX data.

More than 30 internationally certified projects are now available on the platform, and carbon credit trading and settlements are denominated in both Hong Kong dollars and renminbi, which makes accessibility and ensuring flexibility for participants.

The ceremony on Thursday brought together more than 100 participants, including Hong Kong Secretary for Financial Services and Treasury Christopher Hui Ching-yu, HKEX Chairman Laura Cha Shih May-lung, HKEX CEO Nicolas Aguzin, and delegates of corporate participants who completed the first trades on Core Climate, and inaugural members of the Hong Kong International Carbon Market CouncilHong Kong International Carbon Market Council.

As countries and regions commit to a green, low emissions and climate-resilient economy, the opportunities for carbon are fast-emerging internationally, according to Hui. In 2021, global carbon credit turnover in voluntary markets hit $2 billion, with compliance markets soaring to $851 billion in the same year. ALSO READ: HKEX enlists HSBC, Tencent to help create the carbon market.

Hui said that HKEX will have a dedicated team that oversees matters related to Core Climate, such as legal and regulatory analysis, client engagement, customer service, technical support, and many other issues.

With its proximity to the mainland, the world's largest carbon market, Hong Kong has a unique role to play in the mainland's carbon action plan and as a sustainable finance hub for the region, Cha said.

Aguzin said that the launch of Core Climate was a significant milestone in our journey to develop Hong Kong into Asia's premier carbon trading hub. More than 30 internationally certified projects that are involved in forestry, solar, wind, hydropower and biomass initiatives in Asia, South America and West Africa are some of the carbon credits on the Core Climate. All projects on the platform, including carbon avoidance, reduction and removal projects, are verified by Verra against the Verified Carbon Standard.

ALSO READ: HKEX to consolidate HK's position as a financing center.

The launch of Core Climate will help to consolidate Hong Kong as a leading international carbon trading center, according to Yuan Shu, deputy chief executive of Bank of China Hong Kong.

The platform uses renminbi and Hong Kong dollars for pricing and settlement, and it also helps in the development of renminbi in the offshore market, Yuan said.

Bank of China Hong Kong is one of the first batch of market participants of Core Climate, and has successfully completed multiple transactions in the first batch of transactions while transactions are priced and settled in renminbi and Hong Kong dollars.

HKEX will work closely with the Hong Kong International Carbon Market CouncilHong Kong International Carbon Market Council and all key stakeholders to enhance Core Climate, supporting the growth, vibrancy and maturity of the carbon ecosystem in the region.

READ MORE: HKEX keeps serving as a bridge connecting mainland, global markets.

In July, HKEX formed the Hong Kong International Carbon Market CouncilHong Kong International Carbon Market Council, consisting leading corporates and financial institutions to support the development of an international carbon marketplace.