JSE Ventures, a division of the Johannesburg Stock Exchange (JSE), has initiated the first-ever carbon credit trades in South Africa through the launch of the JSE Ventures Voluntary Carbon Market. This groundbreaking development signifies the commencement of carbon credit transactions that are eligible for offsetting against the country’s carbon tax obligations.

The inaugural trade within this new market involved the exchange of 10,000 credits at a rate of $8.25 per credit, effectively covering around 80% of the prevailing tax rate of $20.25 (equivalent to 190 South African rands) per ton. The JSE revealed this information in a recent statement, underscoring the importance of this milestone in bolstering sustainability efforts within the region.

Operating the carbon market in collaboration with Xpansiv, a global exchange specializing in environmental commodities, JSE Ventures offers a platform for trading carbon credits and renewable energy certificates from both local and international registries. These credits serve a dual purpose of aiding in tax compliance and supporting voluntary commitments, thereby facilitating the realization of corporate net-zero objectives.

Valdene Reddy, the Director of Capital Markets at JSE, emphasized the significance of these initial trades, highlighting the exchange’s dedication to providing sustainable products that attract investments in carbon credit projects and broaden the buyer base for credit sellers. She expressed optimism about facilitating more trades in the future and encouraged South African businesses subject to carbon tax liabilities to explore offsetting opportunities.

In addition to carbon credit trading, JSE Ventures has introduced International Renewable Energy Certificates (IRECs) to enable companies to offset their scope 2 emissions, which are associated with energy obtained from external sources. Russell Karas, a senior executive at Xpansiv, emphasized the positive implications of these initiatives, noting that the trade of domestic project credits for compliance purposes signifies the advantages of establishing a centralized regional marketplace. This move is expected to enhance South Africa’s carbon and renewable credit markets, thereby accelerating corporate net-zero initiatives.

Since partnering with Xpansiv, JSE Ventures has been actively engaging with stakeholders, facilitating connections between participants, project developers, and financiers to enhance the availability of environmental credits in the market. South Africa’s implementation of a carbon tax in 2019, coupled with provisions for phased adoption and the utilization of approved carbon credits to aid the transition towards net-zero emissions, underscores the country’s commitment to environmental sustainability.

In conclusion, the launch of the JSE Ventures Voluntary Carbon Market represents a significant step towards fostering environmental responsibility and sustainable practices in South Africa, setting the stage for broader participation in carbon offsetting and renewable energy initiatives.