Abu Dhabi state fund Mubadala Investment Company confirmed on Wednesday that it has acquired a strategic stake in Singapore-based AirCarbon Exchange (ACX).
Two sources close to the matter had earlier told Reuters about the deal.
AirCarbon in February this year partnered with Abu Dhabi‘s financial freezone, Abu Dhabi Global Market (ADGM), to establish the first regulated carbon trading exchange and clearing house in the capital.
Mubadala‘s acquisition supports the plan by the oil-rich emirate to establish the exchange that will allow companies to trade and finance carbon credits, said the sources, declining to be named as the matter was not public.
Mubadala confirmed the acquisition when contacted by Reuters, while ACX did not immediately respond to a request for comment.
Emissions trading schemes, or carbon markets, are market-based tools meant to limit greenhouse gas emissions. They put a cap on the amount countries or companies can emit, and if they exceed those limits, they can buy permits from others.
One of the sources said Mubadala‘s stake in AirCarbon was at least 20%, and that AirCarbon has already started building a team in Abu Dhabi and received regulatory approval from ADGM.
The UAE, an OPEC member, announced in October last year its commitment for net-zero emissions by 2050.
Reuters