(Bloomberg) -- AirCarbon Exchange is closing its operations in Abu Dhabi after only one year of trading.
Its clearing functions will be shifted to Singapore, where the company’s based, it said in a statement.
ACX set up its Middle East outpost in Abu Dhabi Global Market in August 2021, and the first purchases were made on the platform a year ago.
Investors and companies wanting to improve their environmental credentials could buy carbon credits on the bourse, which was touted as the world’s first fully-regulated carbon exchange.
Abu Dhabi sovereign fund Mubadala Investment Co. bought a stake in ACX Abu Dhabi in November 2022, in a move it said would “support both the decarbonization and diversification of the UAE economy.”
But demand for the credits has been muted. Governments in the Middle East don’t require companies to offset their emissions, and voluntary purchases of carbon credits have been dented around the world by allegations of greenwashing.
Saudi Arabia announced its own voluntary carbon market in September 2021, potentially splitting the region’s demand for credits across the platforms. Dubai Financial Market carried out a carbon credit trading pilot program in December last year.
(Updates with background on carbon credits from fourth paragraph.)
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