SA stock exchange to list carbon credits for farming, forestry projects
The operator of Africa’s largest stock and bond exchanges, JSE Ltd., has announced plans to commence trading carbon offsets within the next two months. This initiative follows the establishment of a strategic partnership between the Johannesburg-based company and Xpansiv Ltd., a provider of infrastructure for trading environmental commodities such as carbon credits and renewable energy certificates.
Speaking in an interview on Monday, JSE's Chief Executive Officer, Leila Fourie, revealed that the exchange has already received interest from at least five sellers eager to register for the trading platform. "We expect that the first credits to be issued will be around April and May," stated Fourie, Bloomberg reports.
While South Africa may not lead the continent in carbon credit production, it remains Africa’s largest emitter of greenhouse gases. With the country gradually implementing a carbon tax, the demand for offsets is poised to soar. Additionally, South Africa holds the distinction of being Africa’s top producer of solar and wind power, further underlining its role in environmental initiatives.
The initial carbon credits to be traded on the platform will be linked to forestry and farming projects aimed at carbon absorption, according to Fourie. These credits, each equivalent to a ton of climate-warming carbon dioxide removed from or prevented from entering the atmosphere, are sought after by greenhouse gas emitters seeking to offset their environmental impact.
"Our vision is to expand and create a pan-African venture or infrastructure," remarked Fourie. "Carbon sellers from various African countries could register their credits, making them available not only to South Africans but also to other African nations such as Kenya."
Global estimates from BloombergNEF suggest that the carbon credits market could burgeon to a staggering $1 trillion annually, a significant leap from its current valuation of approximately $2 billion. Recognizing the potential for growth, JSE is already in discussions with two other African exchanges to collaborate on trading offsets using the established platform.
