Indian Energy Exchange (IEX) rose 1.24% to Rs 138.25 after the company announced the formation of a wholly owned subsidiary, International Carbon Exchange (ICX), to explore business opportunities in the voluntary carbon market. IEX established a new subsidiary with a Rs 10 crore authorised share capital and a Rs 5 crore paid-up share capital.
According to the press release, international Carbon Exchange has been incorporated to establish and operate a platform for the trading of various types of green products, including all other forms/types of carbon credits and certificates, as well as various emission reduction products and other instruments and derivatives thereof, in ready, forward, and futures markets in India and abroad.
IEX will pay for the entire paid-up share capital. The company will purchase 50,00,000 equity shares at Rs 10 each, totaling Rs 5 crore. According to the power exchange, ICX will enable participants to buy and sell voluntary carbon credits at competitive prices via its transparent and reliable platform, facilitating a 45% reduction in global greenhouse gas (GHG) emissions by 2030 in order to stay on track to limit global warming to 1.5 degrees Celsius. The recently concluded COP 27 emphasised the importance of reducing GHG emissions. In the national context, India has set a goal of reaching Net Zero emissions by 2070.
Furthermore, ICX will assist corporations in meeting their climate commitments. The exchange platform will provide a strong market signal to attract additional investments in sustainable projects and will assist corporations in allocating capex toward energy transition in the most efficient manner. According to industry estimates, global annual demand for voluntary carbon credit is expected to reach around 1.5 gigatonnes by 2030, with India contributing around 200 million tonnes, according to the company.