up the chimney”.
The voluntary carbon market (VCM) could see its value approach $1 trillion by 2037 if stakeholders adopt more rigorous quality standards and put a greater emphasis on carbon removal, according to a report published Monday. This would solidify market confidence, lift prices, and drive demand. Avoided deforestation credit prices have been declining in the wake of damning reports about widespread over-crediting. Meanwhile, a record 260 financial institutions participated in a campaign last year to get firms to disclose their environmental impact, a 56% increase over 2021.
In the US, an asset manager substantially increased their sales over the last 12 months in a fund that invests in compliance carbon markets worldwide. RGGI Allowance (RGA) prices gave up some of the prior week’s gains as gas prices and power demand lessened. The UK is expected to announce some £600 million in support to help decarbonise two steelmakers, potentially joining the global green subsidy push. EUAs gave up an early rally to three-week highs but still ended the day modestly higher.
Australian Carbon Credit Units (ACCUs) have increased their value by around 11% across the board over the past week. Smart Freight Centre and the World Business Council for Sustainable Development (WBCSD) have released a new guidance to support GHG emissions data sharing across the logistics value chain. The EU Commission has launched a consultation on the reform of the electricity market design. The Netherlands wants to close Europe’s largest gasfield this year because it is considered dangerous to keep operating it. One of Europe’s biggest investors is putting banks on notice and may start exiting the sector unless it sees proof that claims of portfolio decarbonisation are matched by action. The International Energy Agency (IEA) has acknowledged “weaknesses” in how biomass energy is counted in national statistics.
The global carbon markets are rapidly evolving as stakeholders, investors, and regulators ramp up their scrutiny of the finance industry’s role in fueling GHG emissions. Companies are being encouraged to better understand and track their logistics emissions on a granular operational level and to quantify the footprint of end-to-end logistics emissions, from supplier to final customer. The EU Commission is working on a legislative proposal to make the electricity market design fit for the future, allowing it to deliver the benefits of affordable clean energy to everyone. The Netherlands is aiming to shut down its earthquake-prone Groningen gasfield by October 1, while ABP, Europe’s biggest pension fund, is setting “transparent” key performance indicators that financial firms must meet in order to avoid being sold off in the next three years. The IEA has acknowledged “weaknesses” in how biomass energy is counted in national statistics and is encouraging more efficient burning of biomass.
Overall, the global carbon markets are growing in importance and are becoming increasingly complex as stakeholders, investors, and regulators strive to ensure that carbon emissions are reduced and that the environment is protected.