Platts proposes launch of new Carbon Credit Indices, powered by Viridos AI

S&P Global Platts is proposing to launch six new 'CARBEX' carbon credit indices with its partner Viridios AI, an environmental technology company that has built artificial intelligence technology to bring pricing transparency to the emerging environmental commodity space, from Aug. 23, 2021.

The six new carbon credit indices will reflect the value of different types of voluntary carbon credits and enhance market transparency in the complex voluntary carbon credit and co-benefit markets.

Co-benefits are terms attached to carbon credits that provide evidence of meeting the 17 Sustainable Development Goals, or SDGs, defined by the United Nations General Assembly.

Viridios AI has developed artificial intelligence software that generates current values for a range of carbon credits, based on historic relationships between a broad data set of carbon credit transactions and related commodity prices.

Viridios' AI software will be trained using Platts commodity data, in addition to Viridios' extensive database of carbon credit transaction data. It will then generate daily Carbon Index Prices for explicitly defined parameters based on daily inputs of current related commodity prices.

The AI's output will differ from a traditional price assessment, which relies on bids, offers and trade data. Instead, the AI will generate daily indices that reflect current market prices for specific project types that carry defined sets of SDG co-benefits, outlined below.

In partnership with Viridios, Platts is proposing to launch the following six AI-driven carbon credit indices:

Household Devices CARBEX: Projects that are focused on sustainable development within individual communities by upgrading basic needs with cleaner alternatives. This index includes Cookstoves and Water Purification projects, including the following SDGs:

• Good Health & Well-Being (3)
• Equality (5)
• Affordable & Clean Energy (7)
• Decent Work & Economic Growth (8)
• Responsible Consumption & Production (12)
• Climate Action (13)
• Life on Land (15)

Soil CARBEX: Projects that focus on improvements to agriculture and commit to best practice land-use management, resulting in the increased sequestration of CO2 from the atmosphere and the development of soil organic carbon. This index includes regenerative farming involving a range of activities from residue and nutrient management (mulching, composting, cover crops, etc) to agronomic practices (no-till/low-till, crop rotation, agroforestry, etc), including the following SDGs:

• Good Health & Well-Being (3)
• Clean Water & Sanitation (6)
• Decent Work & Economic Growth (8)
• Responsible Consumption & Production (12)
• Climate Action (13)
• Life on Land (15)

Eco Create CARBEX: Projects that are focused on carbon sequestration through activities such as reforestation, afforestation and wetlands restoration. This index includes Afforestation, Reforestation and other ecosystem restoration projects which include the following SDG: Climate Action (13).

Eco Create CARBEX Biodiverse: Projects that are focused on carbon sequestration as outlined in Eco Create CARBEX above, but which also include the following additional SDGs:

• Life Below Water (14)
• Life on Land (15)

Eco Protect CARBEX: Projects that focus on avoiding deforestation and forest degradation. This index includes REDD/REDD+ projects which include the following SDGs:

• Climate Action (13)
• Life Below Water (14)
• Life on Land (15)

Eco Protect CARBEX Social: Projects that focus on avoiding deforestation and forest degradation as outlined in Eco Protect CARBEX above, but which also include the following additional SDGs:

• No Poverty (1)
• Zero Hunger (2)
• Good Health & Well-Being (3)
• Quality Education (4)
• Gender Equality (5)
• Clean Water & Sanitation (6)

All of the new CARBEX indices are standard-neutral, global and reflect current year vintage and delivery.

Platts is soliciting feedback on the six proposed new AI indices, as well as additional feedback about other potential AI indices to help bring further transparency to pricing in the Voluntary Carbon Markets.

These new indexes will be available via Platts Platform and in the Platts Pricing Database.

Please send all feedback, comments and questions by July 30 to Platts_Carbon@spglobal.com and pricegroup@spglobal.com.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.