Viridios AI’s “Marks” product is the first of its kind delivering dynamic pricing for specific carbon projects at vintage level, providing information that is not readily available to market participants.
The “Marks” product provides dynamic pricing directly from market activity and augmented by VAI’s AI computer programs that complete the historical and vintage gaps. This is achieved through the use of:
- Neural pathways trained on five years of historical trading data
- Thousands of data points gleaned from Compliance Carbon Markets
- Systemic economic conditions
- Benchmarks including energy markets; and
- Proprietary trading data.
“The value discovery that “Marks” and the VAI platform provide is crucial to improving transparency, liquidity and accuracy in the carbon market, which will help to attract a wider range of market participants along with the capital flows required to achieve climate and net-zero targets,” says Viridios AI CEO Marcelo Labre.
Voluntary Carbon Market transparency critical, with the market set to top $50 billion
The launch of the VAI platform and the “Marks” product comes as the Taskforce on Scaling Voluntary Carbon Markets estimates that the market for carbon credits could be worth $50 billion by 2030. On the supply side, new issuance of Voluntary Carbon Market (“VCM”) credits increased by 88 per cent in 2021 to 350Mt, compared to 2020. VCM supply is projected to grow to 2,300Mt in 2030.
“In 2021, the VCM exceeded $1 billion in annual transactions for the first time, around 300 million tonnes of global GHG emissions. This volume is set to increase exponentially as more corporates and investors turn to the market to meet net-zero targets,” Labre says.
“Rapid growth in demand, supply and traded volume creates a more urgent need for transparency, to ensure the VCM can operate efficiently and keep up with demand.”
Creating greater transparency in the Voluntary Carbon Market
Viridios AI’s Marks platform was the brainchild of Marcelo Labre, who has spent decades in financial markets and saw an opportunity to use machine learning and artificial intelligence (AI) to help improve transparency in carbon markets and provide market participants with a way to address the underlying issue of price opacity.
“Creating the systems to support the decarbonisation of the global economy is perhaps the greatest challenge faced by the finance industry since its legal and institutional frameworks were established in the late 19th century,” says Labre.
“The highly fragmented and unregulated nature of the VCM, low liquidity with the majority of transactions conducted over-the-counter, and valuation methodology discrepancies, result in a lack of transparency.”
“To help solve this, I wanted to build a tool for all market participants to help them organise and verify the carbon information they need to operate in the market and make more informed investment decisions,” Labre says.
Carbon offset project information
Beyond pricing, another challenge market participants face in order to buy and sell carbon credits has been where to find more complete information on the carbon offset project itself.
The VAI platform provides market participants with a single place where they can efficiently and quickly access end of day marks and project details. According to Viridios AI CTO Bertrand Le Nézet:
“We wanted to provide participants with complete and dynamic carbon market intelligence on a single dashboard for the first time. Pulling together thousands of public and private data points at a project level, it’s an incredibly powerful carbon market intelligence tool.”
VAI also assesses the co-benefits of a project, which are the contributions it makes toward the 17 UN Sustainable Development Goals (SDGs), providing an additional layer of analysis demanded by market participants.
Improving visibility through S&P Platts CARBEX Carbon Credit Indices
To further enhance transparency and improve visibility of its carbon data, over the past nine months Viridios AI’s technology and valuation methodology has been powering Platts CARBEX Carbon Credit Indices.
CARBEX offers six indices which reflect the value of different types of voluntary carbon credits. It also provides information on co-benefit markets, which are often attached to carbon credits to provide evidence of them meeting the 17 Sustainable Development Goals (SDGs).
“The platform leverages environmental AI expertise provided by Viridios AI and has been trained on thousands of data points covering carbon market activity. Currently, it covers many of the world’s most traded and investible carbon offset projects,” Labre says.
“We believe our partnership with Platts further helps to improve transparency and empower market participants to trade carbon credits with confidence.”
Accessing Viridios AI’s platform
Viridios AI is offering a 14 day free trial of its VAI Platform allowing users to access the:
- AI-driven valuation tool
- SDG inclusion options
- Pricing grid with CSV download
- End of day marks (prices)
- Project watchlist
- Market benchmarks
- Project details and eligibilities (CORSIA, etc)
“We’re offering a free trial period to help market participants understand the power of the platform. When the trial ends they can then subscribe to continue to access the information they need,” says Labre.
Disclaimer: This article is provided for information purposes only, and Viridios AI Pty Ltd (“Viridios AI”) makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to any data and other information included in this article. Prices shown are indicative and Viridios AI is not offering to buy or sell or soliciting offers to buy or sell any financial instrument whether or not referencing any commodity, or any physical commodity, including but not limited to voluntary carbon credits or other emissions allowances. Without limiting any of the foregoing and to the extent permitted by law, in no event shall Viridios AI, nor any affiliate, nor any of their respective officers, directors, partners, or employees have any liability for (a) any special, punitive, indirect, or consequential damages; or (b) any lost profits, lost revenue, loss of anticipated savings or loss of opportunity or other financial loss, even if notified of the possibility of such damages, arising from any use of or reliance upon this article or its contents. Other than disclosures relating to Viridios AI, the information contained in this article has been obtained from sources that Viridios AI believes to be reliable, but Viridios AI does not represent or warrant that it is accurate or complete. If this article contains recommendations, they are general recommendations that were prepared independently of any other interests. This article does not contain personal investment recommendations or investment advice or consider the individual financial circumstances or investment objectives of any person who receives it. Investors must independently evaluate the merits and risks of the investments discussed herein, including any sanctions restrictions that may apply, consult any independent advisors they believe necessary, and exercise independent judgement with regard to any investment decision. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). Information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results. The information provided does not constitute a financial benchmark and should not be used as a submission or contribution of input data for the purposes of determining a financial benchmark.