XELS, a startup that hopes to tackle climate change by increasing participation and transparency in carbon markets, has launched its blockchain-based carbon offset platform.
The company is initially focused on voluntary carbon offset credits, which are increasingly attractive to companies that want to show consumers they’re serious about reducing their carbon footprint.
Since the birth of carbon markets following the Kyoto Protocol and Paris Agreement, fraud has hindered the effectiveness of carbon credit sales and trading. Bad actors sometimes sell fake or expired credits, and “recycling” fraud had led to the double spending of unretired credits.
Carbon markets are the perfect use case for blockchain’s distributed ledger technology, as transactions cannot be modified, reversed, or duplicated. Carbon credits that exist on the blockchain can also be “burned,” with a publicly visible record proving it has been retired forever.
“We believe that decentralization is the only way that carbon markets can work effectively,” explains XELS founder and CEO Takeshi Nojima. “XELS will enable the industry to maintain open, transparent records – from generation, to sale, to retirement.
Making it easy for corporations to transparently offset their carbon without fear of fraud will make them even more willing to combat global warming, and it will pay dividends as far as consumer trust that they’re truly intent on making a difference for the environment.”
In addition to putting voluntary carbon credits on the blockchain, the company also seeks to offer “compliance” credits, which are heavily regulated under national cap and trade agreements. Japan lags behind European nations, where businesses are compelled to buy compliance credits to avoid heavy taxes.
XELS is already in talks with numerous listed companies in Japan that are keen to get on board with Prime Minister Yoshihide Suga’s target of reaching net zero domestic emissions by 2050.
XELS is cognizant of concerns surrounding the high energy consumption associated with popular incumbent blockchains. Later this year, XELS will migrate its platform to a proprietary, low-energy blockchain that the company has been developing since 2017.
XELS Chain takes a hybrid proof-of-stake and proof-of-work approach, while enabling users to run a full node on a basic laptop without the need for power-hungry mining hardware.
XELS, based dually in Tokyo and Hong Kong, is a member of the Climate Chain Coalition.
Source Yahoo Finance