Mubadala acquires stake in Hub71-based AirCarbon Exchange

Mubadala Investment Company (Mubadala) and Hub71-based AirCarbon Exchange (ACX) have successfully completed a transaction under which Mubadala has acquired a strategic stake in ACX, supporting ACX’s establishment of the first fully regulated carbon trading exchange and carbon clearing house in Abu Dhabi.

ACX is a global environmental commodities exchange that leverages blockchain architecture to create securitised carbon credits. This framework allows corporates to trade and finance carbon credits like conventional financial assets, increasing participation and investment in global programmes for carbon emission reduction and offset.

The announcement was made during the first edition of Abu Dhabi Finance Week (ADFW) hosted by ADGM between November 14-18 2022.

Ahmed Jasim Al Zaabi, chairman of Abu Dhabi Global Market (ADGM), said: “The UAE continues to be a leader in leveraging the path to a lower carbon economy to safeguard the environment, drive down emissions and create lasting economic opportunities. The investment by Mubadala in ACX is a great testament to the commitment towards climate action, which will enable investors and businesses to voluntarily purchase verified emissions reductions in the form of carbon credits within the progressive ecosystem of ADGM.”

Badr Al Olama, ED of UAE Clusters at Mubadala Investment Company, said: “The UAE is spearheading the transformation of the financial ecosystem, and this investment is a testament to our role in contributing to it. By investing in Air Carbon Exchange and pioneering the future of environmental commodities, we demonstrate our ability to combine impact with investments that support both the decarbonisation and diversification of the UAE economy.

Thomas McMahon, CEO and co-founder of ACX also added, “We are honoured today to announce Mubadala’s investment in ACX. It represents Mubadala’s confidence in the growth potential of ACX and validates the hard work the team has committed to developing ACX and our joint commitment going forward to scaling the voluntary carbon market both in region and globally.”

ADGM is the first jurisdiction to regulate carbon credits and offsets as environmental instruments, a class of financial instruments, and to license exchanges and clearing houses that operate both spot and derivatives markets.

ACX has recently been granted recognition orders by the Financial Services Regulatory Authority (FSRA) to operate as a Recognised Investment Exchange (RIE) and as a Recognised Clearing House (RCH) in ADGM.

Last year, ACX was recognised as the Best Carbon Exchange in Environmental Finance’s prestigious Voluntary Carbon Market Rankings.

In January 2022, ACX partnered with the UN Framework Convention on Climate Change (UNFCCC) to promote carbon offsetting via UNFCCC Certified Emission Reductions (CERs) to allow clients representing 30 different countries to purchase and retire CERs for their carbon offsetting purposes.