OTC volume of voluntary emission offsets nearly tripled in 2007, and Ecosystem Marketplace has once again teamed up with New Carbon Finance to crunch and analyze this fascinating market. The full report is now available for download.
Subtitled "Forging the Frontier" to highlight the emergence of more than twenty independent standards for verifying and validating voluntary offsets, this year's State of the Voluntary Carbon Markets report has been compiled from 150 suppliers of carbon offsets, as well as registries and brokers.
The report was made possible with funding from top sponsors MGM International, EcoSecurities, Evolution Markets, APX Inc., as well as sponsors Blue Source, Baker McKenzie, Cantor CO2e, Sterling Planet, TÜV SÜD, and Equator Environmental.
This year's survey identified several key trends in the voluntary carbon markets. Among the highlights:
• The average price paid to offset one tonne of CO2 or equivalent greenhouse gases rose 49% from 2006 to 2007, from $4.10/t to $6.10/t. Prices ranged from as a low as $1.80/t to as high as $300/t.
• Volume in the over-the-counter (OTC) market nearly tripled in 2007, to 42 million tonnes of carbon credits. Combined with the 23 million tonnes transacted on the CCX in 2007, a confirmed total volume of 65 million tonnes was transacted in the voluntary carbon market in 2007.
• Ecosystem Marketplace and New Carbon Finance valued the international OTC market at $258 million in 2007. Together with the CCX, which was valued at $72 million, the global voluntary market was worth a total of $331 million in 2007. This more than triples the 2006 market value of $97 million.
• In the OTC market, energy efficiency, renewable energy, methane destruction, and forestry/land based projects were the most dominant project types in 2007.
• The percentage of projects sourced from Asia nearly doubled, from 22% in 2006 to 39% in 2007, while the percentage of projects sourced in Africa actually declined both in market share (6% to 2%) and – more disturbingly – in absolute terms.
• Buyers of voluntary credits tend to purchase offsets that most closely resemble those of the compliance market rather than indulge in the sort of experimentation and innovation that many believe the markets offer.
"We're seeing significant growth, almost tripling in volume, as well as signs of maturation in the market, such as standards and registries," explained Katherine Hamilton, an author of the report and Associate Director at Ecosystem Marketplace.
"According to our estimates, the market value has even grown stronger than absolute volumes as buyers are willing to pay more for their offsets. Relative to 2006 the market value has grown by 240%, which is significantly higher than even the regulated markets," noted Milo Sjardin, Head of North American Operations at New Carbon Finance.