Carbon Markets Infrastructure (CMI) Working Group

Building robust and interoperable carbon market infrastructure is critical for ensuring market integrity and scalability. At COP28, the World Bank released an engagement roadmap towards rebuilding trustworthy and transparent carbon markets to have a tangible impact towards addressing the global climate crisis. This roadmap “High Integrity, High Impact: The World Bank Engagement Roadmap for Carbon Markets” recognized that the key enabler for this was reinstating trust in the carbon markets. 

An integral part of reinstating and strengthening trust in carbon markets is through harmonizing and standardizing functionalities and entities across the carbon markets ecosystem. This would entail agreeing upon minimum service standards, common frameworks, and governance across the ecosystem of key players and entities such as principles-setters, independent standards, registries, validation and verification bodies, and rating agencies. This in turn requires entails working with all relevant stakeholders to unlock the most critical bottlenecks in global architecture and support development countries to build market infrastructure, institutions, and policy (see Figure 1 on key challenges and recommendations for carbon markets, in particular Figure 2, which illustrates challenges and potential solutions for carbon market infrastructure). 

 Key challenges and recommendations to strengthen carbon market infrastructure

In this context, the World Bank set up the Carbon Market Infrastructure (CMI) Working Group including a wide range of stakeholders ranging from policymakers, exchanges, regulators, standard setters, and other infrastructure providers across the value chain (see the current list of participants in the bottom of the page). 

The objective of the Working Group is to identify key bottlenecks that hinder the security, efficiency, and interoperability of carbon market infrastructure, as well as outlining priority areas for action to address these challenges in the medium and long term. This collaborative effort is essential for building a robust system that supports global carbon trading and contributes to effective climate action. 

In the Working Group inaugural meeting, participants identified and prioritized three essential areas for action based on the current bottlenecks —Ecosystem Governance, Information Security & Transaction Integrity, and Interoperability—which will guide the group’s efforts and collaborations moving forward. 

Ecosystem Governance (Priority Area I): 

Priority area I of the CMI WG centers on mapping and clarifying current  ecosystem governance within carbon markets, with an emphasis on identifying  key entities and functions within market infrastructure.

Overarching Bottlenecks: Conflicting roles, responsibilities, and functions across the carbon market infrastructure ecosystem. 

To address this, the Working Group will establish clear, consistent terminologies and frameworks; identify the roles and responsibilities of entities across value chain stages to ensure accountability, transparency, and effective coordination among all market participants. This effort aims to clearly define and distinguish these elements within the ecosystem.

Information Security & Transaction Integrity (Priority Area II):

Priority area II of the CMI WG consists of strengthening information security  and transaction integrity in carbon markets.

Overarching Bottlenecks: Poor documentation and inadequate knowledge of current practices and standards related to Information Technology security and transaction integrity measures, undermines trust in the market. 

To address this, the Working Group will develop common guidelines on good practices to strengthen the security of information systems and ensure the integrity of transactions, reducing the risks of fraud and enhancing trust through robust standards such as MFA and KYC/AML/ABC programs.

• Kick-off Presentation on Priority Area II by S&P and Xpansiv [link]

Data and Systems Interoperability, and Digital MRV (Priority Area III): 

Priority area III of the CMI WG is based on the recognition that data and systems interoperability in carbon markets is critical to building cohesive and efficient  market infrastructure. 

Overarching Bottlenecks: Lack of interoperability of data and systems across carbon markets value chain, combined with the absence of a well-defined integrated marketplace architecture. 

To address this, the Working Group will develop common guidelines on technical standards, data taxonomies and formats, and best practices to enhance data harmonization and systems integration, enabling seamless information exchange across platforms and improving interoperability, transparency, and scalability within the carbon markets.

These three priority action areas are closely interwoven, targeting systemic bottlenecks within the carbon markets infrastructure ecosystem, including fragmentation, information asymmetry, and unclear accountability. Progress in these areas hinges on effective collaboration and alignment among stakeholders to develop a resilient and robust market infrastructure essential for sustainable carbon markets.

Members of the CMI Working Group

Abaxx Exchange, Air Carbon Exchange, B3—Brazilian Stock Exchange, BeZero Carbon, Climate Action Data Trust (CAD Trust), Climate Impact X, CME Group, Ecoregistry, European Bank for Reconstruction and Development (EBRD), Global Carbon Council (GCC), Global Carbon Market Utility (GCMU), Gold Standard, Indian Energy Exchange (IEX), INFRAS, Integrity Council for the Voluntary Carbon Market (ICVCM), Intercontinental Exchange, International Standards Organization (ISO), International Swaps and Derivatives Association (ISDA), Johannesburg Stock Exchange (JSE), Nasdaq, Philip Lee LLP, Puro.earth, S&P Global, Stock Exchange of Thailand (SET), SustainCERT, Sylvera, US Treasury, Verra, World Bank, and Xpansiv.

The International Organization of Securities Commissions (IOSCO) Secretariat and the Climate Data Steering Committee (CDSC) participated as observers.