The Project:
A cutting-edge tokenization platform was exploring tokenizing carbon credits as a potential vertical for the platform. As a trusted advisor to the platform, we spearheaded exploring the potential options for issuing blockchain-based carbon credits and derivative products, and guided the platform’s thinking on the various token designs.
As a pilot project, the platform opted to tokenize a forward contract in CCERs. We were
responsible for project managing the pilot, from the design and structuring of the tokenized forward contracts to launching the campaign to enable investors to buy and trade the tokens.
This pilot project demonstrates the immense potential for sustainable finance, where a primary objective is to catalyze financing towards projects that contribute to the net zero transition. By leveraging blockchain technology, we can efficiently facilitate this by:
- enabling project developers to raise financing prior to completion of the green project by issuing tokenized forward contracts of the environmental attributes to be
generated (Forward Tokens), both from offtakers and banks taking offtake interests as security; and - tracking the environmental benefits generated by the green project throughout the project lifecycle using digital MRV and issuing tokens representing such environmental benefits (Environmental Attribute Tokens) for trading. The Environmental Attribute Tokens can be automatically swapped with Forward Tokens once issued through the use of smart contracts.
We believe this is where sustainable finance should be heading in the future.
