GreenBiz.com, 24 July 2007 – The voluntary carbon market grew by 200 percent last year, and is expected to set more records in 2007, according to a report released last week.
The Ecosystem Marketplace and New Carbon Finance commissioned “State of the Voluntary Carbon Markets 2007: Picking Up Steam,” an assessment that analyzed current trends, buyer motivation and pricing history. The results included predictions that the market would continue growing in leaps and bounds, despite potential future legislation.
“This report underscores the importance of transparent and robust standards to ensure quality and credibility within the emerging emission reductions market. For buyers worldwide, the quality of the offset is of paramount concern,” said Eron Bloomgarden, EcoSecurities U.S. Country Director. “Continued development of rigorous industry protocols will play a critical role in the continued maturation of the voluntary offset market.”
The report valued the global carbon market at $91 million in 2006, with about 23.7 million tons of carbon dioxide emissions transacted. The volume-weighted average price was $4.1 per ton. Projects with strong quality and verifiable attributes, such as landfill methane, coal mine methane and forestry, commanded the highest prices.
During the last five years, the number of companies supplying carbon credits has grown by 200 percent. Projects that involve forestry sequestration, renewable energy and industrial gases accounted for the bulk of projects, the report said. The market provides ample opportunity for smaller projects that generate less than 5,000 tons of carbon emissions.
North American and European markets drove most of the demand in the voluntary carbon market, the report found.
“Survey respondents reported that 68 percent of their customers are based in the United States and 3 percent in Canada,” the report said.
The European Union accounted for 28 percent of respondents’ customers, and more than 30 percent of suppliers of carbon offsets.
Overall, the largest buyers of carbon offsets were businesses. The report found that corporate social responsibility drove the market, with large gains coming from North American markets. The ran counter to researcher expectations, who anticipated that the possibility of future regulation would play a larger role in the decisions to buy carbon offsets.
The report urged the implementation of industry standards, certification and verification processes to reduce the “buyer beware” market.