Seagrass Limited (“Seagrass”), a carbon marketplace and climate action company focused on scaling climate impact and a wholly-owned subsidiary of E.ON, one of Europe’s largest operators of energy networks and energy infrastructure, announced its official launch today.
Seagrass aims to unlock the potential of the carbon markets and transform carbon finance, which can make an important contribution to the net-zero transition. It will bring together supply from certified projects with large-scale demand from buyers with ambitious climate strategies on a centralised marketplace driven by technology, transparency and integrity.
Seagrass will be based in the Abu Dhabi Global Market (ADGM) financial centre located in Abu Dhabi in the United Arab Emirates (UAE). It holds a license to arrange trades in environmental instruments from ADGM’s Financial Services Regulatory Authority.
The UAE is positioned at the crossroads between the Global South – where many nature-based carbon credits are originated – and places where demand for these credits is expected to grow, including Europe and Asia. The UAE will also host COP28, with the development of high-quality voluntary carbon markets expected to be a key area of focus.
“Carbon markets will play a crucial role in the transition to a sustainable world,” said Naveed Tariq, CEO of Seagrass. “They can deliver climate impact at scale to help us meet the 1.5°C Paris Agreement goal and be instrumental in providing the trillions of dollars needed to close the climate finance gap.”
“As the subsidiary of a large energy company, we know what buyers need: liquidity, ease of use and – above all – integrity,” he added. “Our ambition is to work with partners to build that market and deliver climate solutions that ultimately help us to restore the planet.”
Arvind Ramamurthy, Chief of Market Development at ADGM said: “We are delighted to welcome Seagrass to ADGM. We are confident that ADGM’s dynamic ecosystem and progressive regulations will enable Seagrass’ vision, supporting them in driving innovation across rapidly developing carbon markets and contributing to the continuous development of Abu Dhabi’s strategic value and equally to accelerating the UAE’s energy transition. We look forward to witnessing the positive impact of Seagrass’ expertise in contributing to the growth and development of the financial ecosystem in Abu Dhabi and beyond.”
Seagrass is being launched at a time when carbon markets are developing integrity standards in response to market demands and to support much-needed scale. These include the Voluntary Carbon Markets Integrity Initiative’s (VCMI) Claims Codes of Practice, which aims to accelerate corporate use of the market as part of net zero strategies, and the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles label, which is intended to support buyers in identifying and pricing high-integrity carbon credits.
According to scenario analysis by MSCI Carbon Markets, demand for carbon offsets could increase from 500 MtCO2e in 2023 to 1,312 MtCO2e by 2030 and 4,356 MtCO2e by 2050, led by hard-to-abate sectors.
As a carbon marketplace, Seagrass will connect major buyers of credits from a range of sectors – including energy, industrials, transportation and financial services – with credits from certified projects.
Seagrass is developing an assurance framework for credits available on its marketplace. This framework will require the certification of projects by recognised bodies. While ratings for different projects vary and can change rapidly, we will also establish minimum ratings requirements.
Our framework will include measures to ensure that projects traded on Seagrass deliver reductions or removals of emissions that are measurable, additional and permanent. We will also assess metrics related to projects’ social and biodiversity impact.
Alongside these safeguards, we will screen project governance and risks relating to corruption, human rights violations and armed conflict. We will develop a minimum standard in respect of these risks and exclude projects that do not meet it. As the voluntary and compliance market adopts new standards for high-quality credits and innovation, Seagrass will align its supply with those standards and buyers’ demand.
The platform will facilitate a market board, spot trading, block trades and auctions to cater to the different settlement needs of market participants. As well as trading on the platform, Seagrass’ team of demand- and supply-side specialists will help clients facilitate private investments.
Once onboarded on Seagrass, buyers will be able to choose from a wide range of projects around the world and complete deals in days rather than weeks or months, which would be the typical timeframe for bilateral transactions. Seagrass will offer access to projects that catalyse investment in nature-based solutions as well as those that finance emerging climate technologies.
Seagrass also provides buyers and sellers with an intuitive digital platform and tools to make carbon trading and investment simple. Users will have access to Seagrass Carbon Map, which brings together a wide range of data points on the real-world impact of projects, including environmental, economic and project information. Created in collaboration with Inacta, Esri Sverige, MSCI Carbon Markets, OroraTech and The Hashgraph Association, the application will also support ongoing engagement between Seagrass users and project developers.
ACX (AirCarbon Exchange) is the exchange software and infrastructure provider for the Seagrass marketplace, offering an integrated exchange, custody and clearing services to users. ACX is the world’s first regulated carbon credit exchange and clearing house, established in the ADGM.