UK Carbon Registry, Archax to launch tokenised carbon-linked securities

Archax on Wednesday said it has partnered with UK Carbon Registry for the launch of a new regulated note structure providing institutional access to carbon-linked digital assets, enabling institutional and professional investors to access the product via established market frameworks.

“The underlying of the first issuance is PURE Carbon, a high-impact water conservation and emissions reduction project. Emissions data is captured at source, processed securely, and structured in collaboration with GenTwo into a regulated note, issued as a tracker certificate with an ISIN and listed on the SIX Swiss Exchange,” the London-based digital asset exchange explained.

“We’re delighted to collaborate with Archax for the PURE Carbon Tracker note and the underlying PURE tokens, powered by Flowchain,” said Adrian Fraine, finance director at UK Carbon Registry.

“It completes the regulatory and institutional pathway we set out to create in 2021. Enabled through United Nations and International Organisation for Standardisation climate management and governance processes, along with Archax’s regulated custody of carbon mitigation activity, we can provide project owners and investors with a framework they recognise and can operate securely within.”

The instrument provides exposure to carbon-linked assets and the structure supports corporate compliance and reporting requirements - including the emissions trading system and EU/UK Carbon Border Adjustment Mechanism (CBAM), Archax said.

Nick Donovan, chief commercial officer at Archax, said: “This partnership marks an important step forward in the evolution of climate finance, demonstrating how regulated market structure can be used to support climate-impact objectives at institutional scale. We are pleased to be leveraging Archax’s regulated, institutional digital asset platform in partnership with UK Carbon Registry.”

ICE Clear Europe, last month filed a self-certification with the Commodity Futures Trading Commission to harmonise the delivery timetables of ICE Futures Europe's ‘Deliverable CORSIA Eligible Emissions Units Contracts’ and ‘Carbon Credit Contracts,’ with the ICE Futures Europe UK Allowance futures contract expiry schedule.

PwC Germany and Enmacc in March said that the CBAM became a volatile cost component for European importers beginning January, calling for effective risk management.