Title of box one goes here, try to keep less than 85 characters in lengthLiquidity plays a critical role in the development and credibility of carbon markets, enabling capital to flow efficiently into high- impact mitigation projects. To support this, Standard Chartered (SC) has developed innovative financing models that help bridge the gap between project development and capital access. In one case, SC structured a first-of-a-kind loan to support enhanced rock weathering (ERW)-based carbon removal credits (CDR) for offtakers. The loan provided upfront capital for project implementation and monitoring, with repayment tied to the future delivery of CDR credits under a long-term offtake agreement. Risk was partially mitigated through specialized insurance. By aligning near-term financing with future carbon revenue, SC offered a scalable, bankable structure that improves liquidity and helps new projects and technologies get access to capital. The case had a wide range of applications across industries. For airlines to reach net-zero, for example, they will need to buy CDRs, which are currently high cost and small-scale. By getting capital in early and providing projects with cashflow certainty, SC’s goal is to scale up new technologies and reduce unit costs by using bank financing rather than more expensive sources such as venture capital. By including the insurance wrapper, SC along with specialist insurer CFC Underwriting were able to de-risk the structure and rely on the offtaker’s creditworthiness to price the loan. This structure can also be used for any operational carbon project that needs upfront financing with a long-term creditworthy offtaker. In another transaction, SC arranged a $3 billion sustainability- linked revolving credit facility for a major airline group.47 The facility includes a carbon credit purchase mechanism triggered if decarbonization targets are missed. SC, acting as carbon counterparty, sources and retires high-quality credits under strict criteria. More importantly, this structure illustrates how carbon markets are expanding the toolkit available to financial institutions, enabling them to better support clients’ decarbonization and net-zero strategies. . CASE STUDY 11 Standard Chartered – enhancing carbon market liquidity Note: 1. ERW = enhanced rock weathering, a nature-based CO2 removal strategy that helps address climate change by taking carbon out of the air and storing it in rocks. Source: expert interview with Standard Chartered. Loan facility Offtake agreement CDR developer CDR platform CDR offtakerStructurer/lender Carbon insuranceTransaction diagram CDR unitsUpfront funding for ER W activities1 CDR units CDR paymentsLoan Principal + inter est repayment Asia’s Carbon Markets: Strategic Imperatives for Corporations 43

Asia's Carbon Markets Strategic Imperatives for Corporations 2025