Mubadala Investment Company has acquired a stake in AirCarbon Exchange, the world’s first fully regulated carbon exchange program.
Mubadala Investment Company (Mubadala), an Abu Dhabi sovereign investor, has acquired a stake in AirCarbon Exchange (ACX), a global carbon exchange market based out of Abu Dhabi’s Hub71 tech ecosystem. The deal is part of Mubadala’s support for ACX’s establishment of the first fully regulated carbon trading exchange and carbon clearing house in Abu Dhabi.
Mubadala and ACX
ACX is a global environmental commodities exchange that uses distributed ledger technology. leveraging blockchain architecture to create securitized carbon credits. This framework allows corporates to trade and finance carbon credits like conventional financial assets, increasing participation and investment in global programs for carbon emission reduction and offset.
As part of its responsible investing and economic diversification mandate, Mubadala is investing in commercially attractive solutions to the world’s most significant challenges and is purposefully deploying capital in high growth sectors that drive substantial change.
The announcement was made during the first edition of Abu Dhabi Finance Week (ADFW) hosted by ADGM between 14 and 18th November 2022, in partnership with key economic drivers of the Abu Dhabi economy and a group of global and regional financial institutions. The week-long event serves as a platform for in-depth conversations around the MENA region’s thriving financial sector, industry trends, developments and innovation involving financial markets and global banking.
Commenting on the deal, H.E. Ahmed Jasim Al Zaabi, Chairman ADGM, said, “The UAE continues to be a leader in leveraging the path to a lower carbon economy to safeguard the environment, drive down emissions and create lasting economic opportunities. The investment by Mubadala in ACX is a great testament to the commitment towards climate action, which will enable investors and businesses to voluntarily purchase verified emissions reductions in the form of carbon credits within the progressive ecosystem of ADGM. As one of the first-fully regulated jurisdictions in the world to regulate carbon credits and offsets as environmental instruments in a voluntary market, ADGM is committed to playing a leading role in facilitating the transition to a lower carbon economy by stimulating sustainable finance flows of investments.”
The UAE: Moving toward a lower carbon economy
Badr Al Olama, Executive Director of UAE Clusters at Mubadala Investment Company, said, “The UAE is spearheading the transformation of the financial ecosystem, and this investment is a testament to our role in contributing to it. By investing in Air Carbon Exchange and pioneering the future of environmental commodities, we demonstrate our ability to combine impact with investments that support both the decarbonization and diversification of the UAE economy.”
Thomas McMahon, CEO and Co-Founder of ACX added, “We are honored today to announce Mubadala’s investment in ACX. It represents Mubadala’s confidence in the growth potential of ACX and validates the hard work the team has committed into developing ACX and our joint commitment going forward to scaling the voluntary carbon market both in region and globally.”
Regulating carbon credits
ADGM is the first jurisdiction to regulate carbon credits and offsets as environmental instruments, a class of financial instruments, and to license exchanges and clearing houses that operate both spot and derivatives markets. In addition, ADGM itself has achieved ‘carbon neutrality’ by offsetting its 2021 carbon emissions as an organization to become the world’s first carbon-neutral international financial center, underpinning its commitment to building a progressive and more sustainable economy in line with the UAE Net Zero by 2050 Strategic Initiative.
Last year, ACX was recognized as the Best Carbon Exchange in Environmental Finance’s prestigious Voluntary Carbon Market Rankings. In January 2022, ACX partnered with the UN Framework Convention on Climate Change (UNFCCC) to promote carbon offsetting via UNFCCC Certified Emission Reductions (CERs) to allow clients representing 30 different countries to purchase and retire CERs for carbon offsetting purposes.
In March, Saudi Arabia’s PIF announced the first partners to join the creation of a MENA-wide carbon market.