STX Group and Base Carbon have agreed to jointly launch an investment vehicle aiming to scale global carbon markets and promote the integrity of high-quality carbon removal credits.
The companies said their main investment focus will emphasize greenfield carbon solutions which carefully quantify and verify the amount of carbon removed. Projects will also be in accordance with Paris Agreement standards, other global standards for carbon markets, and local regulations.
STX will reportedly provide project origination, development services, and handle marketing and distribution, while Base Carbon will manage the fund, providing its existing investment platform and corporate infrastructure.
“We are very excited to be collaborating with STX Group, a leader in global environmental markets, and this innovative investment vehicle represents an important and exciting new business venture for Base Carbon,” said Michael Costa, CEO of Base Carbon. “We continue to anticipate exponential growth in global demand for quality carbon credits as we approach 2030 net-zero commitments. We believe this investment vehicle is an attractive and non-dilutive pathway to further diversify and scale Base Carbon’s future revenue streams within the core competencies and resourcing of our existing team and infrastructure.”
Carbon markets have grown in recent years as companies and organizations look to decarbonize.
Carbon credits may be purchased to offset emissions, specifically from hard-to-abate aspects of company operations or in areas where emissions-reducing technologies are not yet available at scale. Carbon credit purchases support projects meant to reduce carbon emissions, such as reforestation, ecosystem restoration, or carbon capture. Carbon markets are expected to value $800 billion this year, according to a Bloomberg report.
With such growth, efforts have been made to ensure that carbon credits maintain high levels of transparency and that projects are meeting their claimed amount of carbon removal. A recent partnership between the Institute for Global Environmental Strategies and the International Emissions Trading Association will design national and international rules for high-quality carbon credits and promote carbon markets as a key policy tool.
Additional efforts have been made to bring particular industries into carbon markets so they may benefit from their associated revenue.
For example, Dengo and ReSeed announced a partnership earlier this month that will allow carbon credit buyers to support regenerative agriculture in the cacao industry. Such partnerships may allow farmers, small forest landowners, and others taking part in emissions-reducing practices to benefit from carbon markets.
