Latest news with #PACM
Finextra
07-07-2025
- Business
- Finextra
Pan-African Payment and Settlement System and Interstellar unveil African currency marketplace
Building on the successful rollout of its groundbreaking continental payment infrastructure, the Pan-African Payment and Settlement System (PAPSS), in strategic collaboration with Interstellar, a leading African deep-tech company, have announced the launch of the PAPSS African Currency Marketplace (PACM). 0 This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. The launch was announced on the sidelines of the 2025 Afreximbank ( Annual Meeting (AAM2025) held in Abuja from June 25 - 28. This next-generation Financial Market Infrastructure (FMI) represents a bold evolution of the PAPSS mission, addressing Africa's longstanding challenge of currency inconvertibility and enabling seamless, sovereign currency exchange for intra-African trade. For decades, Africa's economic momentum has been hindered by a fragmented financial landscape. The continent's 41 currencies, diverse regulatory environments, and lack of convertibility have created significant friction. To trade with neighbouring countries, African businesses have often relied on external (hard) foreign currencies for foreign exchange, creating what experts call the "hard and costly currency bottleneck." This workaround drains an estimated $5 billion annually in fees, delays, and opportunity costs, undermining the competitiveness of African enterprises and slowing progress toward realising the African Continental Free Trade Area (AfCFTA). 'PAPSS African Currency Marketplace is fully transparent, order book-driven, and operates with trusted counterparties, strictly adhering to local regulatory frameworks and global best practices,' affirmed Mike Ogbalu III, CEO of PAPSS. 'By creating a single, continent-wide liquidity pool, PACM serves as a powerful liquidity engine for intra-African commerce.' This launch marks a major strategic evolution in the PAPSS journey. According to Mr Ogbalu, since its official launch in 2022, PAPSS has enabled real-time cross-border payments across 17 countries, connecting 14 national switches and over 150 commercial banks. Initially piloted in the West African Monetary Zone (WAMZ), PAPSS rapidly expanded to become the core settlement layer of the AfCFTA's financial infrastructure. But while payment rails were laid, a deeper issue remained. 'We soon realised that solving for payments alone was not enough,' explained Mike Ogbalu. 'Corporations, airlines, reinsurance firms, and multinationals operating across Africa still faced a persistent hurdle: trapped capital, arising from limited currency convertibility and overreliance on hard currencies.' For example, he explained, over $2 billion is currently 'trapped' in African countries where airlines operate, unable to repatriate their funds due to exchange restrictions or depreciation of local currencies. 'The PAPSS African Currency Marketplace is the answer to that problem -- an extension of our commitment to building sovereign, frictionless financial infrastructure for Africa.' He added. The PAPSS African Currency Marketplace jointly developed by PAPSS and Interstellar, enables the direct exchange of African currencies without passing through hard currencies. As a transparent, continent-wide, peer-to-peer platform, it allows businesses to trade directly in local currencies in near real-time while remaining compliant with national regulations. It unlocks liquidity, releases trapped capital, eliminates excessive foreign exchange costs, and supports the continent's long-term goal of financial sovereignty. In partnership with PAPSS, the PAPSS African Currency Marketplace is built on Interstellar's enterprise-grade, blockchain-agnostic infrastructure, which enables the use of permissioned blockchain technology while ensuring institutional grade-security, scalability, and near instant settlement. 'This is not just about technology, it is about fulfilling a continental vision,' said Ernest Mbenkum, Founder and CEO of Interstellar during a fireside chat at the launch. 'PAPSS African Currency Marketplace was built from the ground up to serve Africa's specific needs. PAPSS and Interstellar are not just collaborators, we are co-architects of a new financial future, aligned in purpose and committed to transformation.' Ernest Mbenkum further emphasised, 'African currencies deserve a better place in the world. With this marketplace, your local currency is no longer just a medium of exchange, it becomes a vehicle of opportunity.' He also highlighted that this is only the beginning of Interstellar's vision, stating, 'We're building a future where Africa no longer needs to wait for foreign rails to move value. Our infrastructure will power Africa's financial renaissance.' Haytham El Maayergi, Executive Vice President of Afreximbank, noted: 'The PAPSS African Currency Marketplace gives us the power to transform trade dramatically, bringing us to trade with each other with a major benefit that we can now accept each other's currency.' The impact is already being felt. During its pilot phase, more than 80 African corporates transacted across 12 currency pairs, with all transactions settled in local currencies. For example, a company like Kenya Airways, which earns Nigerian Naira from ticket sales, can now use PACM to directly exchange Naira for Kenyan Shillings—without converting through a third currency. Early adopters include ZEP-RE (PTA Reinsurance Company) and Access View Africa, which called the platform 'a dream come true.' PAPSS African Currency Marketplace liberates trapped capital, eliminates excessive FX costs, and transforms multi-week settlement delays into near real-time execution. PAPSS CEO Mr. Ogbalu noted that following positive experiences of some early adopters, PAPSS had received interest from institutions outside Africa seeking to join the ecosystem. 'This demand proves the value of what we've built,' he said. With over 150 banks already connected through PAPSS and growing demand across the continent, PAPSS African Currency Marketplace stands as a game-changing financial tool for a more unified, sovereign, and efficient Africa. Concluding his opening keynote, Mr. Haytham El Maayergi, Executive Vice President - Global Trade Bank at Afreximbank reiterated: 'Africa will not rise by ideas. Africa will rise by actions. " The PAPSS African Currency Marketplace is now open to eligible corporations, financial institutions, and other market participants across the continent.
Euractiv
03-07-2025
- Business
- Euractiv
EU's 2040 climate target brings back welcome dose of pragmatism and flexibility
On Wednesday the European Commission presented its proposal for the bloc's next climate target, targeting a 90% reduction in greenhouse gas emissions from 1990 levels by 2040. Europe's 2040 target is the key missing piece in the EU's decarbonisation pathway toward its mid-century net-zero goal. However, the Commission has emphasised that the policies to achieve this target must differ from those designed to deliver the climate goal of at least a 55% net GHG reduction by 2030 - calling for more pragmatism and greater flexibility. The Commission's suggested target includes a quota of 3% of the target that can be met through the use of international carbon credits generated under Article 6 of the Paris Agreement. The proposal heralds a new era of market-based cooperation under Article 6, by offering companies the 'flexibility' to deliver emissions reductions and removals where they are most cost-effective. IETA welcomes this pragmatic move by the Commission to link the EU ETS with the wider international carbon marketplace. European policymakers have long been sceptical about allowing international credits into EU carbon markets, often citing the EU's 'negative experience with CDM credits.' This reluctance harks back to the period from 2008 to 2020, when the EU allowed the use of credits issued under the Clean Development Mechanism (CDM) to meet a limited portion of the emission reductions required by EU ETS compliance entities. Unfortunately, CDM credits entered the EU's carbon market just as the 2008-9 global financial crisis hit, creating a perfect storm of decreasing demand and increasing supply in the EU ETS. Additionally, CDM credits were not without controversy concerning their environmental integrity, forcing the EU to introduce bans on certain types of projects entering the EU ETS. Today, however, international credits are very different from what they were 15 years ago. Article 6 now provides a global framework for international carbon market collaboration, and the nascent Paris Agreement Crediting Mechanism (PACM) is delivering standardised rules and improved governance. Credits generated under Article 6 represent a significant shift from the CDM era; they are subject to more stringent methodologies, mandatory safeguards, and corresponding adjustments to ensure high environmental integrity and to prevent double counting of emission reductions. And while the PACM is still being operationalised, a clear demand signal from the EU is precisely what the emerging global carbon market needs. Engagement with international credits and enhanced inter-sectoral flexibilities have the potential to ease the cost of the EU's low-carbon transition, especially for hard-to-abate sectors. In this context, the role of Article 6 credits should not be limited to supporting mitigation efforts in land-based and forestry sectors. While IETA applauds the proposal to recognise permanent carbon removals under the EU ETS - as this can help boost market liquidity and reduce price volatility - the next step should be to integrate international carbon credits removal into the EU's carbon market, starting with removals generated under the Paris Agreement Crediting Mechanism. Naturally, all eligible removals must meet high-quality criteria, with credible safeguards on permanence and reversal risk. But maintaining market stability and the effective functioning of the EU ETS must remain a priority. The EU should be able to set guardrails to guarantee the quality of imported credits and to control their quantity and market impact. The same principle should apply to the integration of domestic removals - their interaction with EU and Member State policies and impact on carbon market functioning should be closely monitored. We urge Member States and the European Parliament to support enhanced flexibilities and the role for Article 6 credits in the 2040 climate package. We acknowledge that agreeing specific rules for market-based cooperation and integration of removals into the EU ETS will take time. The legislative package is expected next summer, followed by months - or years - of negotiations with co-legislators. Still, the proposal for the 2040 target deserves a swift endorsement, to provide business with stability and long-term predictability. That should be followed by in-depth analysis to determine whether the proposed flexibilities are sufficient. The Commission proposal represents a strong vote of confidence in international carbon markets, which is all the more significant after the EU's chastening experience with carbon credits in the 2008-2020 period. It also highlights the immense efforts of stakeholders around the world to increase the reliability and integrity of carbon reductions. Julia Michalak is the EU Policy Director at IETA and, Andrea Bonzanni is the International Policy Director at IETA.
Scoop
22-05-2025
- Business
- Scoop
Key Rules Agreed For Credible Climate Project Crediting Under UN Carbon Market
16 May 2025 - A UN Body responsible for setting up a carbon market under the Paris Agreement adopted important new standards to guide how emission-reducing projects measure their impact. Known as the Paris Agreement Crediting Mechanism (PACM), it enables countries and other actors to work together on reducing greenhouse gas emissions by generating high-integrity carbon credits that support global efforts to fight climate change. Key standards agreed The rules adopted set out how to measure a project's actual emission reduction impact under the mechanism. Specifically, two key standards were agreed: A standard for estimating the emissions that would have happened without a project under the mechanism (known as the 'baseline'). The adoption of this standard is a historic step in ensuring that crediting under the mechanism reflects the ambition of the Paris Agreement. It includes a requirement for an initial downward adjustment - for example, setting historic or current baselines at a level 10% below business-as-usual emissions - as well as a minimum 1% downward adjustment over time across all baseline approaches. These features are designed to drive ongoing improvement and help avoid over-crediting by steadily lowering the benchmark against which emission reductions are measured. A standard for accounting for any unintended increases in emissions that might happen elsewhere as a result of a project (known as 'leakage'). The leakage standard will help those developing methodologies to identify all potential sources of emissions. It clarifies that project-level REDD+ activities must be included in the host country's national REDD+ strategy in order to qualify, helping ensure alignment with national climate efforts and reinforcing the credibility of emission reductions. The agreed standards reflect wide input from experts and stakeholders. They are key to ensuring that carbon credits issued under the PACM are ambitious, real, additional, and verifiable. Further outcomes Beyond adopt i ng the baseline and leakage standards, the Supervisory Body also made a number of related decisions to support implementation. These include a process of consultation on how project benefits can be shared equitably with host countries, and a renewed focus on capacity building to help countries build the systems they need to take part in the mechanism - including through clearer roles for host countries. The Supervisory Body also adopted a decision on the transition of cookstove activities, bringing earlier projects in line with the latest available data and guidance. "This was a very significant meeting. We finally adopted a groundbreaking decision ensuring crediting levels are set consistently with a pathway to net neutrality, through a process of minimum downward adjustment of crediting levels over time.' said Martin Hession, Chair of the Supervisory Body. 'We are already uniquely placed to support host countries considering crediting, and have decided here to enhance communication with countries, by providing a dedicated channel for them to secure their fair share of mitigation benefits, initiating a dialogue on host country roles and responsibilities, as well as exploring options for enhanced and targeted capacity building. We have also moved to ensure the quality of certain transition projects by requesting the application of the most recent applicable data.' Maria AlJishi, Vice Chair of the Supervisory Body, said: 'We're grateful for the ongoing engagement and feedback from stakeholders throughout this process, and for the Methodology Panel's work in helping to draft these standards. They provide the clarity developers need to begin designing activities under the Paris Agreement Crediting Mechanism and are key to fully operationalizing it.' Next steps The outcome of this meeting paves the way for methodologies under the Paris Agreement Crediting Mechanism to accelerate implementation. While this marks important progress, fewer than anticipated project transitions from the Clean Development Mechanism are expected to result in a short-term funding gap, until a pipeline of new projects using PACM methodologies begins to build from 2026 onward. The Supervisory Body will continue to monitor the funding situation carefully and will be reporting to the Parties to the Paris Agreement on this matter. With the foundations in place, the Supervisory Body will continue developing other key elements of the mechanism, including additional tools, guidelines, and the mechanism Registry. The first PACM methodologies are expected to be approved by the Supervisory Body by the end of the year. Notes: The Paris Agreement Crediting Mechanism (also known as Article 6.4) is a carbon crediting mechanism established under the Paris Agreement. It allows countries to raise climate ambition and implement national action plans more affordably. It identifies and encourages opportunities for verifiable emission reductions, attracts funding to implement them, and allows cooperation among countries and other groups to conduct and benefit from these activities. The Paris Agreement Crediting Mechanism has a Supervisory Body tasked with developing and supervising the requirements and processes needed to operationalize it. This includes developing and/or approving methodologies, registering activities, accrediting third-party verification bodies, and managing the Article 6.4 Registry.
Time of India
19-05-2025
- Business
- Time of India
UN climate body adopts new guidelines to strengthen emission-reduction assessment of projects, the mechanism to help countries cut emissions
NEW DELHI: The UN climate change body, responsible for setting up a global carbon market under the Paris Agreement, has adopted new standards to guide how emission-reducing projects measure their impact. Tired of too many ads? go ad free now It will allow countries, including India, to raise climate ambition and implement national action plans more affordably. Known as the Paris Agreement Crediting Mechanism (PACM), it will enable countries and other non-state stakeholders to work together on reducing greenhouse gas (GHG) emissions by generating high-integrity carbon credits that support global efforts to fight climate change. The move comes at a time when India has also taken an important step to ensure that all its traditionally high-emission industries — such as aluminium, cement, and pulp and paper — to reduce their GHG emissions to meet specific targets under the compliance mechanism of the Carbon Credit Trading Scheme, 2023. The new standards, adopted by the UN body in its May 12-16 meeting held in Bonn, Germany, will also help India finalise its draft policy on the issue, which was notified last month to bring hard-to-abate industries on board to reduce their GHG emission intensity, beginning 2025-26. Two key specific standards, adopted during the meeting, include a standard for estimating the emissions that would have happened without a project under the mechanism (known as the 'baseline') and another accounting for any unintended increases in emissions that might happen elsewhere as a result of a project (known as 'leakage'). 'They are key to ensuring that carbon credits issued under the PACM are ambitious, real, additional, and verifiable... The outcome of this meeting paves the way for methodologies under the PACM to accelerate implementation,' said the UN climate change body in a statement on the decisions adopted in Bonn. 'This was a very significant meeting. We finally adopted a groundbreaking decision ensuring crediting levels are set consistently with a pathway to net neutrality, through a process of minimum downward adjustment of crediting levels over time,' said Martin Hession, chair of the supervisory body. Tired of too many ads? go ad free now The rules, adopted by the UN supervisory body, identify and encourage opportunities for verifiable emission reductions, attract funding to implement them, and allow cooperation among countries and other groups to conduct and benefit from these activities.
