Abu Dhabi's Mubadala acquires stake in world's first fully regulated carbon exchange

ACX uses distributed ledger technology leveraging blockchain architecture to create securitised carbon credits

Officials at the signing ceremony. Photo: Twitter
Officials at the signing ceremony. Photo: Twitter


Published: Thu 17 Nov 2022, 2:49 PM

Mubadala Investment Company and AirCarbon Exchange (ACX) have successfully completed a transaction under which Mubadala has acquired a strategic stake in ACX, supporting ACX's establishment of the first fully regulated carbon trading exchange and carbon clearing house in Abu Dhabi.

ACX, based in Hub71, is a global environmental commodities exchange that uses distributed ledger technology leveraging blockchain architecture to create securitised 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 Abu Dhabi Global Market (ADGM), 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.

The agreement was signed by Badr Al Olama, Executive Director, UAE Clusters at Mubadala, Dhaher Bin Dhaher, Chief Executive Officer of Registration Authority at ADGM, and William Pazos, Managing Director and Co-Founder of ACX, in the presence of Ahmed Jasim Al Zaabi, Chairman of ADGM, and Musabbeh Al Kaabi, Chief Executive Officer of UAE Investments at Mubadala.

Commenting on this, Al Zaabi 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."

Commenting on this transaction, Al Olama stated, "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 ACX and pioneering the future of environmental commodities, we demonstrate our ability to combine impact with investments that support both the decarbonisation and diversification of the UAE economy."

For his part, Thomas McMahon, CEO and Co-Founder of ACX, commented, "We are honoured 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."

Mubadala's commitment to the energy transition and climate impact began in 2001 with some of the foundational investments were made. This partnership is a step forward and a continuation of Mubadala's strategic and long-standing support for the acceleration of the UAE's energy transition and its achievement of net-zero emissions by 2050.

Last year, ACX was recognised 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 their carbon offsetting purposes.

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