Nasdaq, the global technology company, has unveiled an innovative technology aimed at revolutionizing the carbon credit market. The new offering, which focuses on digitizing the issuance, settlement, and safekeeping of carbon credits, will be made available to market infrastructures, registry platforms, and other global service providers. The primary objective of this service is to foster the growth and institutionalization of global carbon markets, which currently operate with bilateral trading and manual processes that limit scalability and hinder substantial capital inflows.
Nasdaq’s cutting-edge carbon credit digitization technology addresses the need for flexibility, standardization, and connectivity in carbon markets. Roland Chai, Executive Vice President at Nasdaq, emphasized the importance of bringing institutional-grade technology to underpin the market, driving greater liquidity and interoperability between registries in the future. The technology allows market operators and registries to create standardized digital credits and distribute them with full auditability throughout the transaction lifecycle. Nasdaq has also developed a carbon taxonomy framework that can accommodate new types of credit as the market expands. Comprehensive APIs will facilitate seamless interaction across the market, establishing a standardized and trusted ecosystem capable of attracting high-quality liquidity.
The service utilizes smart contract technology to enable secure creation, processing, and management of rights linked to the underlying asset. By automating asset servicing and settlement procedures, the technology promises increased efficiency and transparency throughout the trade lifecycle. Digitization and automation ensure a comprehensive audit trail of credit ownership and retirement. The issuance, settlement, and custody capabilities can integrate with existing financial system architectures or operate as an independent platform, offering flexibility to connect with traditional payment networks and bilateral settlement options. This allows infrastructure providers to tap into growth prospects in carbon markets without incurring substantial costs associated with major changes. Nasdaq also provides infrastructure optionality, enabling the technology to be deployed on either a centralized database or using private blockchain technology.
In addition to the service launch, Nasdaq has announced a collaboration with Puro.earth, a prominent standards and registry platform specializing in engineered carbon removal. The partnership aims to register CO2 Removal Certificates (CORCs) and monitor the issuance, retirement, and transfer of these assets. The goal is to prevent duplication of carbon removal projects and ensure complete traceability and transparency. Through a suite of APIs and standardized contracts, the technology will help drive the growth of voluntary carbon markets. Standardizing carbon credit contracts is crucial, particularly as questions arise regarding the real climate impacts of projects generating these credits. Accurate management of the carbon credit lifecycle is critical in establishing trust, as highlighted by Antti Vihavainen, CEO of Puro.earth. Nasdaq’s technology will modernize Puro.earth’s carbon crediting infrastructure, aligning CORCs with Article 6 of the Paris Agreement. Puro.earth’s Puro Standard represents the first carbon removal standard tailored for engineered carbon removals within the voluntary carbon market. Certified carbon removal suppliers are verified by an independent third-party, and companies seeking to offset their carbon emissions can purchase CORCs directly from suppliers or through a third-party marketplace.
Nasdaq’s cutting-edge technology aims to transform carbon markets by offering digitized issuance, settlement, and custody for carbon credits. The integration with Puro Connect API and adherence to IPCC guidelines set a new standard for carbon removal within the voluntary carbon market. This innovation paves the way for a dynamic and trusted ecosystem, attracting diversified investors while modernizing the carbon crediting infrastructure for market growth.