Thomas McMahon, co-founder and co-CEO of AirCarbon Exchange (ACX), talked with John Lothian News at the FIA International Futures Conference in Boca Raton, FL., about how ACX got its start, its local and global properties, and the policy-driven nature of the environmental markets.
ACX is a voluntary carbon marketplace that was incubated in Singapore from 2018 to 2021, and went live in February 2022 as a spot market for voluntary carbon credits. ACX now has 200 member firms across 31 different countries.
The Paris Agreement provides the backbone for the voluntary carbon market. The 195 signatories to the agreement must adhere to their domestic reporting standards while meeting the interconnected goals of the accord. ACX was built to serve both of those purposes, McMahon said. First, it is a global marketplace, and second, it addresses domestic requirements at the country level. Countries with existing exchanges – like IDX in Indonesia and JPX in Japan – have approached AirCarbon requesting its expertise and market model to address their domestic emissions trading schemes and at the same time create an international order book.
Its most active venture is in Brazil, where AirCarbon held its first auctions last April with a Brazilian partner; it is having discussions with exchanges in Malaysia, Japan, Indonesia, Greece, South Africa, and Egypt, among others.
McMahon’s career started in the cotton markets and ended up in the New York energy and gas markets. He learned every part of it, including all the good parts and the parts that don’t work, and the inefficiencies. ACX was able to build a technology that incorporates the upstream and downstream mechanisms of exchange architecture, as well as incorporating transaction and clearing mechanisms. He said his career legacy in ACX is that he can either tweak, tune or innovate a new market architecture. McMahon anticipates ACX could scale and be a $2 billion to $3 billion market shortly.
The environment is a policy-driven market. All listed companies have an ESG policy file. “But it can no longer be just a policy. It’s got to be actionable,” McMahon said. “This is going to go from the marketing side of corporations to the compliance and Treasury and accounting side of corporations and that’s where we’re going to see the demand.”
We asked McMahon these questions:
- What is AirCarbon Exchange?
- Do you have any deals in place with other exchanges?
- How has your past helped with your current job?
- What is the future for AirCarbon?
- What do the hedgers in this market look like?