JSE launches Carbon Market

The JSE Ventures Voluntary Carbon Market has facilitated the first trades of carbon credits eligible as offsets against the South African Carbon Tax. A total of 10,000 credits traded at $8.25 per credit, which is equivalent to approximately 80% of the current carbon tax rate of R190 per ton.  

JSE Ventures is a division of the Johannesburg Stock Exchange (JSE). The carbon market uses Xpansiv, a spot exchange for environmental commodities, to allow market participants to buy and sell carbon credits and renewable energy certificates that are held in either local or global registries. Carbon and renewable energy credits can be used in compliance programmes, including the carbon tax, as well as in voluntary programmes, to support company net-zero commitments.  

“This is an excellent start to the year and great timing as many South African companies look to align their carbon tax obligations,” says Valdene Reddy, director of capital markets at the JSE. “These transactions reaffirm the JSE’s commitment to providing products in the sustainability sector that not only support investment into projects producing carbon credits but also introducing a wider buyer network to the sellers of the credits. 

“We believe this is only the start and look forward to many more transactions on the platform. This is an open invitation to all South African corporates who are exposed to the Carbon Tax to reach out to us in order to access eligible offsets.”

To further extend opportunities for companies to advance their sustainability goals, the JSE Ventures Carbon Market has launched trading of International Renewable Energy Certificates (IRECs). IRECs enable companies to offset their “scope two” emissions from energy supplied by third parties.

Russell Karas, senior vice president of Xpansiv, says: “The initial trades of domestic project credits to comply with the national compliance prome demonstrates the benefits of creating a centralised regional marketplace. We expect this is the first step in developing robust markets for carbon credits and IRECs, which will enable South African companies to accelerate their net-zero programs and meet compliance requirements.”

Since launching the collaboration between JSE Ventures and Xpansiv, the JSE has been onboarding participants to the Xpansiv platform and assisting with capacity building and introductions to project developers and financiers to expand the supply of environmental credits from the region.

South Africa’s carbon tax was introduced in June 2019 in a phased approach, permitting the use of approved carbon credits, to advance the transition to net zero.