Platts to launch six new Carbon Credit Indices, powered by Viridios AI

S&P Global Platts is launching 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, effective 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 attributes of carbon credits which provide evidence of meeting the 17 Sustainable Development Goals (SDGs) defined by the United Nations General Assembly.

The decision to publish follows from a proposal note available here: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/070621-platts-proposes-launch-of-new-carbon-credit-indices-powered-by-viridos-ai

Viridios AI has developed artificial intelligence software that generates current values for a range of carbon credits. The values generated are based on historic relationships between a broad data set of carbon credit transactions and related commodity prices. Viridios AI software has been trained using Platts commodity and S&P Global Dow Jones Indices data, combined with 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 the commodities listed below:

The following inputs will be used to generate the new AI Indices:

  • Platts Dated Brent ($/b)
  • Platts TTF Mo1 ($/MMbtu)
  • Platts CEC ($/mtCO2e)
  • Thermal Coal CFR West Coast India ($/mt)
  • Dow Jones Sustainability World Index TR
  • S&P Green Bond Index

The AIs output will differ from a traditional price assessment, which reflects market activity at the time of assessment. Instead, the AI will generate daily indices that reflect the complex set of relationships between traded credits and specified underlying benchmarks over the previous five years. The AI will take as daily inputs the benchmarks referenced above and will output indices reflecting project types that carry defined sets of SDG co-benefits, as outlined below.

Platts and Viridios will review the inputs and outputs periodically to ensure the indices remain relevant and invite feedback on the suitability of the published indices. Benchmark inputs have been chosen based on an AI-driven analysis of the strongest correlations with value changes across the carbon complex.

In partnership with Viridios, Platts will 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 will be standard-neutral, global and reflect current year vintage and delivery.

These new indexes will be available via Platts.com, Platts Dimensions Pro and in the Platts Pricing Database.

Please send any further feedback 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.