{"id":5457,"date":"2022-08-04T11:57:46","date_gmt":"2022-08-04T09:57:46","guid":{"rendered":"https:\/\/climatetrade.com\/?p=5457"},"modified":"2023-08-10T11:30:07","modified_gmt":"2023-08-10T09:30:07","slug":"voluntary-carbon-market-value-tops-us2b","status":"publish","type":"post","link":"https:\/\/climatetrade.com\/voluntary-carbon-market-value-tops-us2b\/","title":{"rendered":"Voluntary carbon market value tops US$2B"},"content":{"rendered":"

The value of the voluntary carbon market (VCM) has quadrupled since 2020, reaching almost US$2B in 2021, according to a new report.<\/span><\/p>\n

The latest <\/span>State of the VCM Briefing<\/span><\/a> by non-profit Ecosystem Marketplace reveals that the market has already topped the US$2BN mark in 2022. Growth has been driven by both higher prices and stronger demand for carbon credits, with nearly 500 million credits traded in 2021, at an average price of US$4 per ton \u2013 up 60% year on year.<\/span><\/p>\n

But Ecosystem Marketplace (EM) also attributes this tremendous growth to international efforts to standardize the voluntary carbon market, increasing transparency and quality<\/a>. In particular, the organization cites the Public Consultation for Core Carbon Principles (CCPs) by the Integrity Council for the Voluntary Carbon Market (ICVCM), which launched on July 27, 2022 to provide the framework needed to identify high-quality carbon credits that create real, additional and verifiable climate impact with high environmental and social integrity.<\/span><\/p>\n

\u201cThe ambition of the ICVCM both aligns with and supports EM\u2019s core principle of promoting market integrity and trust through transparently presenting its internationally aggregated and standardized carbon credit trade data. Almost 20 years of experience and relationships with market participants have reinforced the fact that the \u2018quality\u2019 of credits is a key ingredient to market growth,\u201d the report notes.<\/span><\/p>\n

Demand for forestry carbon offsets quadruples<\/b><\/h2>\n

Transaction volumes increased in almost all the carbon credit categories covered in the report, with forest and land use projects showing the strongest growth from 57.8 million credits traded in 2020 to 227.7 million in 2021. Altogether, forestry credit transactions represented about US$1.3B \u2013 almost 67% of the market total in 2021.<\/span><\/p>\n

Renewable energy project demand more than doubled, from 93.8 million to 211.4 million credits. Additionally, the pricing of these credits went from US$1.08 to US$2.26, bringing the value of transactions to a total of US$479.1M.\u00a0<\/span><\/p>\n

Among the types of projects that received less demand in 2021, energy efficiency saw the biggest drop, going from 30.9 million credits in 2020 to 10.9 in 2021. Meanwhile, sales of carbon credits from household and community projects decreased from 8.3 million to 8 million. In both cases, an increase in the price of credits softened the impact of this drop on value.<\/span><\/p>\n

Price premium for co-benefits\u00a0<\/b><\/h2>\n

Projects that presented benefits beyond carbon mitigation, such as community support, biodiversity conservation or contribution to the Sustainable Development Goals (SDGs), were sold at a premium compared to others. For instance, the price of Gold Standard projects, which include co-benefits in the certification process, increased by 35% from US$3.74 a ton to $5.05 a ton.<\/span><\/p>\n

More on this topic:<\/em><\/p>\n