Last week, the AirCarbon Exchange (ACX) said it raised US$15 million in convertible notes led by Singapore-based decarbonization investor TRIREC. The startup offers exchanges for voluntary carbon credits and a variety of blockchain-based tokenized carbon assets.

Other backers of this pre-Series B round include Thailand’s Banpu Public Company and Mubadala Investment Company PJSC following earlier funding from Mubadala in November. This brings the total funds raised to $25 million, including an investment from Deutsche Börse in March as part of a strategic partnership with the Deutsche Börse-owned European Energy Exchange (EEX).

TRIREC credited a strong founding team, “along with the strong structural tailwinds facing carbon markets; we are convinced that ACX will be a major growth driver in our portfolio and an important player in the ecosystem,” said Mevlyn Yeo, founder and managing partner of TRIREC.

AirCarbon started in Singapore and initially focused on CORSIA tokens that support carbon offsets for the aviation sector. Since then, it has expanded its offering to a variety of tokens, including nature-based projects such as forests, renewable energy tokens, carbon capture credits, and others. It uses the public Polygon blockchain.

In April, it announced plans for a regulated voluntary carbon market and clearinghouse in the Middle East as part of the Abu Dhabi Global Market. He is working on establishing a voluntary carbon market in Brazil and has signed an agreement with the Nairobi Stock Exchange to develop Kenya’s first carbon exchange.

ACX has managed to carve out a business position within a competitive blockchain carbon credit space.

The tokenization of carbon credits is a controversial topic for several reasons. In the pursuit of sustainability, some believe that companies should focus more on reducing emissions than offsetting them. Some tokenized carbon credits from other blockchain startups have been criticized for being of low quality. And given the rapid growth of the Toucan Protocol that tokenized carbon credits from the Verra Carbon registry, Verra suspended tokenization and launched a consultation. Verra thought it was confusing that Verra’s credits were marked as withdrawn at the point of tokenization instead of consumption.