Carbon Neutrality Token
Carbon Neutrality Token (CNT®), a proprietary asset-backed token developed by MVGX, enables cross-border trading of high quality voluntary emission reductions without violating the Nationally Determined Contributions (“NDC”) issues.
MVGX’s proprietary systems, blockchain technologies and operational procedures provide safeguards to ensure carbon integrity, avoid double counting, and enhance transparency.
What is a Carbon Neutrality Token?
How does a Carbon Neutrality Token solve double-counting?
Frequently Asked Questions on Carbon Neutrality Tokens (CNT®)
What is the liquidity of CNTs® like?
The liquidity of CNTs® is determined by the issuers and investors. We anticipate that it will become more liquid as more investors are onboard. Moreover, we are developing our Carbon Management System software and services, which will be rolled out to more corporate and businesses and this will lead to further liquidity enhancement.
How are CNTs® valuated?
The valuation of CNTs® is subject to supply and demand. The initial pricing by the issuer is determined by the costs of securing the underlying carbon assets and spread required to make it worthwhile by the issuer, as well as the demand arising from the roadshow processes. After the primary issuance, the pricing of CNTs® is determined by the supply-demand and liquidity on the exchange.
What is the maturity period of CNTs®? Is there a time limit to when they will be retired?
The maturity of CNTs® is set to the earlier of:
- 2050 as the current year to achieve carbon neutrality by most countries; and
- What PAS2060 standard (the current highest carbon neutrality standard and expected to evolve into ISO carbon neutrality standards) can allow the underlying carbon credit used for voluntary carbon neutrality efforts
What are the reporting guidelines that corporates need to follow in order to specify that the CNT® utilized contributes to the Nationally Determined Contributions (NDC) of another country instead of the country that the corporate is registered in?
Firstly, the corporate will need to get ISO14064 for carbon footprint reporting; and PAS2060 for carbon neutrality reporting. In the Paris Agreement (Article 6), NDCs can be transferred across borders but the reporting is still under development after COP26 in Glasgow and it may take another 2 to 4 years to mature.
Would there be any foreseeable regulatory implications that would hinder the purchase of CNTs® where the NDC is not transferred to the buyer’s country? For example, if Singapore mandates purchase of carbon credits that only meet the country’s NDC requirements, how would the system handle CNTs® that were purchased previously?
As various developing countries now understand the core difference between the Kyoto Protocol and the Paris Agreement, we observe that they do prefer this type of approach – given that they need to satisfy their NDC as per the Paris Agreement.
For regulatory compliance purchase of carbon credits, the buyer should buy CNTs®-G, which comes with NDC transferability. However, this will take another 1 to 3 years to develop, as both Singapore and selling country (or countries) need to fully establish the sovereign approval system and registry to make correspondence adjustment work.
Can CNT® or CNTs®-G be resold to another country?
Yes, it is our desire that they can be traded across various countries.
How will CNT® or CNT®-G handle differences in opinion on verification standards? For example, if Country X recognizes both the Gold Standard and VCS certifications but some of Country X’s corporate buyers only recognise the Gold Standard but not VCS, or vice versa.
MVGX will continue to whitelist service providers for the certification of carbon credits. We will leave the standard of verification process to be certified and accepted by internationally most renowned and licensed firms. For now, we have whitelisted Bureau Veritas, DNV and BSI for the listing process of CNTs®.
With Verra and Gold Standard phasing out renewable energy carbon credits, what types of projects will MVGX be tapping on to source CNTs®?
This will be subject to the issuers and the certification firm as mentioned above.
Who would be the custodian of these carbon credit certificates?
For now, MVGX is serving as the custodian but in the future, we will work with whitelisted custodians of these certificates (for example, national carbon exchanges or commercial banks).
Would CNT® buyers have visibility to the specific project(s) that has been undertaken to obtain the CNT®? Would buyers have the choice of selecting which project they would like to purchase carbon credits from?
Yes, we have developed and filed for patents on our Non-Fungible Digital Twin (NFDT) technology, which combines the blockchain technology behind NDT and the Digital Twin technology. The purpose of the NFDT is to create a digital representation of the asset (in this case, carbon emission credit and the underlying project) that is traceable and immutable. Hence, every CNT will have information traced back to a specific project, which is similar to how a Bitcoin can be traced back to where/how it was mined.
However, we would like to make CNT® a commodity – similar to that of crude oil and natural gas. Although you can trace where each CNT® came from, we hope that by selecting the right standard and whitelisted service providers, all of our CNTs® are all fungible to be used for various carbon neutrality purposes that satisfy the same PAS2060 (CNT®) standards or compliance purposes (CNT®-G).