Nasdaq Introduces First-Ever Index Family Focused on Carbon Removal

Published on: 31 March 2022
by KnowESG
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Nasdaq, a stock exchange based in New York, has rolled out the world's first index family, focused solely on tracking the price of carbon removal. The indices will follow the price of CO2 Removal Certificates (CORCs) issued by the carbon removal marketplace Puro.earth.

Through CORCs issued by Puro.earth, the indexes measure the cost of removing carbon dioxide from the atmosphere. CORC is a digital asset that symbolises a tonne of CO2 that has been eliminated from the atmosphere.

The CORC Carbon Removal Reference Price Index family includes a composite index that tracks the price of all types of CORC transactions as well as separate reference price indexes for biochar, a solid form of carbon created through pyrolysis, and bio-based construction materials, such as wood from sustainable forestry used as building materials in housing construction.

Fredrik Ekström, Head of European Fixed Income and ESG at Nasdaq, said: "The new family of indexes creating a reference price for carbon removal is another step in Nasdaq’s journey to create a transparent and credible market for carbon removal together with Puro.earth. The indexes will create a price benchmark to help our clients better understand the true cost of neutralizing their emissions. They will also serve to stimulate the growth of the carbon removal ecosystems by supporting the business case for new carbon removal projects and help potential investors make better-informed decisions.”

CORC Carbon Removal Price Index (CORCX) reflects the cost of sequestering one tonne of CO2 based on an aggregation of CORC transactions from all engineered carbon removal methods supported by the Puro Standard, the first standard for engineered carbon removal based on international carbon accounting standards. CORC Biochar Price Index (CORCCHAR) and CORC Bio-based Construction Materials Price Index (CORCWOOD) measure the cost of removing one tonne of carbon dioxide from the atmosphere in the form of biochar and bio-based construction materials, respectively. The indexes will be updated periodically, and if the number of relevant transactions grows, new indices will be added to the family.

Antti Vihavainen, Chief Executive Officer of Puro.earth, said: "This launch marks an exciting moment for the voluntary carbon market. The indexes will give visibility into the trends of carbon removal credit pricing to climate finance stakeholders and has the potential to pave the way for the commoditisation of CORCs."

Puro.earth recognises firms with goods or processes that remove more CO2 from the environment than they emit as the world's first business-to-business marketplace, standard, and registration dedicated only to carbon removal. CORCs are given once an impartial third party verifies the net negative CO2 emissions. Nasdaq bought a controlling share in Puro.earth in June 2021, as environmental problems become more prominent in the wake of the increase in environmental, social, and governance (ESG) reporting.

According to S&P Global, the voluntary carbon market is quickly expanding, surpassing $1 billion for the first time in 2021. The Taskforce on Scaling Voluntary Carbon Markets predicts that by 2030, the market will have grown to between $5 billion and $30 billion on the low end and $50 billion on the high end.

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