Czech company opens emissions trading via cryptocurrencies

Despite the relative decline in prices of EU ETS emission allowances in recent months, the longer-term trend in their price has been fairly stable growth. Czech energy group Amper now wants to open up the possibility of trading CO2 emission allowances to everyone.

Last week, the company unveiled a beta version of a mobile app through which it will be possible to invest in European Union Emissions Trading System (EU ETS) allowances via a digital currency. The platform will use the technology of Ethereum, the second most widely used blockchain. The new virtual currency, CO2IN, will be directly linked to the value of an emission allowance, with the price of one allowance set at 100 coins.

In addition to making a new form of investment accessible, the aim of the project, called CO2IN, is to make investment in allowances clearer and easier. Its creators expect that the digital currency will be usable for payments to merchants that accept bitcoin and that it will also be tradable on cryptocurrency exchanges.

“In general, the more CO2IN is used, the more allowances will be tied up in it and thus withdrawn from the market. This will not only accelerate modernisation towards a carbon-free economy, but may also further sustain and increase the currency’s value,” said Jan Palaščák, director of the Amper group.

The creators of the idea believe the app will find customers, particularly environmentally conscious ones. By investing in allowances, together with projects in areas such as energy savings or renewable sources, they will be able to reduce their CO2 balance to zero.

Although it is a project of a Czech company, it is not aimed at the domestic market. Amper’s target group is individuals and companies, mainly in the Netherlands, Germany, Austria and Belgium. The app is expected to launch fully in around six months.

Trading in allowances under the EU ETS is the European Union’s main tool for reducing greenhouse gas emissions from larger industrial installations and the power sector. The aim of the system, which covers some 11 thousand installations across Europe, is to reduce emissions cost-effectively. Allowance prices have risen sharply since 2018 (from around 5 euros initially to the current 25 to 30 euros), due to a combination of legislative and market factors.