JSE Ventures has introduced South Africa’s inaugural carbon credit trades on the Johannesburg Stock Exchange (JSE) through the JSE Ventures Voluntary Carbon Market. This historic event signifies the commencement of carbon credit transactions eligible for offsetting against the country’s carbon tax. The initial exchange involved 10,000 credits traded at a rate of $8.25 per credit, covering a substantial portion of the prevailing tax rate of $20.25 (equivalent to 190 South African rands) per ton.

Operated by JSE Ventures, a segment of the JSE, the carbon market operates in collaboration with Xpansiv, a global exchange specializing in environmental commodities. Participants can engage in the trading of carbon credits and renewable energy certificates from both local and international registries on the Xpansiv platform. These credits serve dual purposes of tax compliance and voluntary commitments, thereby supporting corporate initiatives towards achieving net-zero emissions.

Valdene Reddy, the Director of Capital Markets at JSE, emphasized the significance of this milestone, underlining the exchange’s dedication to offering sustainable products that foster investment in carbon credit projects while expanding the market’s buyer base. The JSE looks forward to facilitating more trades and encourages local businesses subject to the carbon tax to explore offsetting opportunities.

In addition to carbon credit trading, JSE Ventures has also introduced International Renewable Energy Certificates (IRECs) to enable companies to offset their scope 2 emissions associated with third-party energy consumption. Russell Karas, a senior executive at Xpansiv, highlighted the far-reaching implications of these developments, emphasizing the benefits of establishing a centralized regional marketplace through initial trades of domestic project credits for national compliance.

The collaboration between JSE Ventures and Xpansiv has led to the onboarding of participants, connecting them with project developers and financiers to bolster the supply of environmental credits. South Africa implemented its carbon tax in June 2019, allowing for phased implementation and the utilization of approved carbon credits to facilitate the transition towards achieving net-zero emissions.

This groundbreaking initiative not only signifies a pivotal moment in South Africa’s environmental landscape but also paves the way for the expansion of the country’s carbon and renewable credit markets, thereby accelerating corporate initiatives aimed at achieving net-zero emissions. The introduction of carbon credit trading on the JSE platform marks a significant step towards a more sustainable future for South Africa’s economy and environmental stewardship.