Rubicon Carbon has announced its launch as a market-based products and solutions emissions reduction platform. With an initial capital commitment of $300 million from TPG’s climate investing strategy TPG Rise Climate and TPG’s multi-sector impact investing strategy The Rise Fund, Rubicon was developed to meet the growing demand for emissions reduction solutions.
While the steady increase in corporate net zero pledges and other corporate climate commitments has led to a rapid increase in demand for carbon credits, it has also exposed weaknesses and imbalances in the market. The addition of new carbon credit brokers, marketplaces, exchanges, and ratings agencies has not fully resolved persistent issues of limited supply, insufficient project financing, variable quality, and lack of accessibility. With a market-based approach, substantial backing from leading climate investors, and an ecosystem of customers, advisors, and partners, Rubicon says it is using the latest technology to address the market’s challenges at scale.
The voluntary carbon market is an important mechanism for accelerating climate action with the urgency required at this moment. Effective, trusted markets can play a vital role in channeling capital to decarbonization projects around the world while supporting comprehensive emissions reduction plans for organizations at any stage of their sustainability journey, including helping close the emissions gap between an organization’s decarbonization strategies and reaching their climate goals, the organizations say.
Rubicon’s initial product, the Rubicon Carbon Tonne (RCT), provides enterprise customers access to proprietary sets of both nature-based and non-nature-based carbon credits. RCTs are backed by an owned inventory of carbon credits which at launch amount to 20 million tonnes of CO2e. All RCTs will include an extensive suite of services, including quality-based curation, continuous monitoring, detailed reporting, and more. The RCT is an end-to-end solution that reduces frictional costs in the carbon market through at-scale procurement and tech-enabled selection, pooling, and delivery of credits.
In addition to products developed for enterprise-scale buyers, Rubicon is developing a scaled financing solution, Rubicon Carbon Capital, to partner directly with carbon credit project developers to implement new carbon projects.
Bank of America, JetBlue Ventures, and NGP ETP, the energy transition investing platform of NGP, are also expected to participate in Rubicon’s initial equity financing and intend to close on their co-investment by the end of Q4 2022. Including contributions from TPG Rise and co-investment, Rubicon is targeting total capital commitments of $1 billion.