IEX Establishes Fully-Owned Subsidiary to Explore Carbon Market

International Carbon Exchange Private Limited (“ICX”), a wholly-owned subsidiary of Indian Energy Exchange (IEX), the country’s leading energy market platform, was established recently to investigate the commercial potential in the voluntary carbon market.

Through its platform, ICX will make it possible for participants to purchase and sell voluntary carbon credits at reasonable prices and will support a 45% reduction in global GHG emissions by 2030 to help keep global warming to 1.5 degrees Fahrenheit on track. The just finished COP 27 reaffirmed the necessity of reducing GHG emissions. India has established a national goal to achieve Net Zero emissions by 2070.

Additionally, ICX will assist businesses in achieving their climate commitment objectives. The Exchange platform will offer a strong market signal to draw more funding to sustainable projects and assist businesses in allocating CAPEX to the energy transformation in the best possible way. According to industry predictions, India would provide over 200 million tonnes of the yearly worldwide demand for voluntary carbon credits by 2030.

IEX’s Chairman & Managing Director, SN Goel stated, “It brings me great pleasure to announce the formation of our wholly-owned subsidiary, International Carbon Exchange, which would be India’s first voluntary Carbon Exchange platform. This is in line with our objective of designing next-generation sustainable energy solutions to provide affordable, trustworthy, and competitive access. We continue to sustainably transition India’s energy market through effective and asset-light enterprises, building on the success of our prior diversification effort, the Indian Gas Exchange, which transformed the country’s gas market. The creation of a trustworthy and transparent carbon trading platform is a crucial step in reaching national and international sustainability goals.”

This initiative is an attempt by IEX to use innovation and technology to speed up the country’s transition to carbon-neutral electricity. This month, IEX became the first power exchange in India to use tradable market-based instruments to offset its carbon emissions.

Earlier, the Indian Energy Exchange (IEX) achieved 8267 MU volume in June ’22 comprising 7058 MU in the conventional power market, 536 MU in the Green Power Market, and 673 MU (6.73 lac Certificates) in the REC Market, registering 17% YoY volume growth across all market segments. Owing to improved supply-side availability, the prices at the day ahead market reduced to Rs. 6.49 per unit in June ’22 from Rs.6.76 in May ’22.