In 2018, the founders of ACX were approached by Enterprise Singapore — the government agency championing enterprise development — to discuss the possibility of launching a digital carbon exchange in Singapore. In 2019, AirCarbon Exchange was launched as an offshoot of these conversations, focusing first on CORSIA (Carbon Offset Reduction Scheme for International Aviation), then quickly expanding across a broader carbon market offering.
By observing the then-existing carbon credit market, we noticed that financial intermediaries dominated carbon credit transactions, forcing sellers to incur large transaction fees, often up to 20-30%. Second, many of the carbon credit marketplaces relied on antiquated technology such as using bulletin boards to market and track carbon credit projects. We set out to eliminate market inefficiencies that required carbon sellers to navigate a multitude of marketing and administrative tasks to post, market, and sell projects. By applying the principles of other commodities markets trading, while leveraging efficient technology underpinnings and establishing consistent pricing benchmarks for carbon credits, we knew we could transform the market. We explored technology innovation and concluded that blockchain was the right digital infrastructure to support an efficient exchange to simplify and secure the trading and settlement process.