S&P Global Commodity Insights has begun exploratory testing with JP Morgan’s blockchain division, Kinexys, to see whether distributed ledger technology could improve carbon credit operations and support climate objectives. The collaboration focuses on tokenizing carbon credits at the registry level, potentially addressing longstanding issues around standardization and market fragmentation.

The testing centers on S&P Global’s Environmental Registry infrastructure, which tracks renewable energy projects, afforestation initiatives and direct air capture technologies that generate carbon offset credits. Through tokenization, stakeholders could more easily access and transact with registry data, while blockchain’s transparency and immutability features aim to build greater trust in voluntary carbon markets. The current phase examines account management, project oversight, and credit lifecycle processes.

This initiative joins a growing number of blockchain applications in carbon markets. The World Bank backed Climate Action Data Trust launched a meta registry using blockchain, integrating data from major registries including Verra, Global Carbon Council, and the UN’s Clean Development Mechanism to prevent double counting of credits. This initiative sounds similar to S&P’s Meta Registry. Separately, Northern Trust has deployed a DLT platform for carbon ecosystems, with Bayer among the companies using the solution. These efforts followed significant controversy during the previous crypto boom when registries were not happy about some of the tokenization projects.

Jonty Rushforth, Head of Product & Portfolio for Energy Transition at S&P Global Commodity Insights, emphasized the potential scope of the work. “If this collaborative testing progresses as hoped, and eventually includes our Meta Registry, this could extend our environmental registry infrastructure solutions to the financial industry, creating a transformative carbon market ecosystem.”

The testing reflects broader industry efforts to standardize carbon credit infrastructure. Keerthi Moudgal, Head of Product at Kinexys Digital Assets, stated: “Our shared aim is to establish standardized infrastructure that enhances information and price transparency, paving the way for financial innovation and increased market liquidity.” Kinexys (formerly Onyx) has processed over $1.5 trillion in transaction volume since 2015, handling more than $2 billion daily across its platform.