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State of Voluntary Carbon Markets Report 2020

Voluntary Carbon and the Post-Pandemic Recovery
A Special Week NYC Installment

In response to strong interest from respondents and other stakeholders, we are excited to announce that we've published the first installment of the State of Voluntary Carbon Markets 2020 report.

"Voluntary Carbon and Post-Pandemic Recovery," was launched at the IETA Carbon Forum North America Virtual Series, kicking off Climate Week NYC, and will be followed up with additional EM Insights on the State of Voluntary Carbon Markets in the subsequent weeks and months.

Download now from the Ecosystem Marketplace Carbon Hub. Several small edits were made to the report on September 23, 2020. If you downloaded the report prior to that, we’d encourage you to refer to this updated version.

What are we seeing in the voluntary markets? Companies worldwide are taking steps to eliminate greenhouse-gas emissions from their operations. In order to deliver deep and cost-effective reductions now, many companies have pledged to become carbon-neutral in the near term by financing emission-reductions elsewhere, or, in climate parlance, “offsetting” any emissions they can’t yet eliminate. As a result, we are seeing record volumes being transacted in the voluntary carbon markets, despite the global COVID-19 pandemic.

This installment also highlights emerging market trends, including new initiatives to guide rapid and responsible market growth, whether demand could exceed supply in the coming years, and outlook for jurisdictional REDD+.

More Key Findings

Corporate carbon-neutral pledges fueled a record transaction volume of at least 104 MtCO2e in 2019, which is an increase of 6 percent over 2018. [These are preliminary figures and may be adjusted with data from new respondents.]
Volume has been surprisingly strong in 2020. Anecdotal evidence based on interviews with market participants indicates it may even exceed that of 2019, despite the COVID-19 pandemic. Broader pledges have compensated for the loss of volume from the aviation and tourism sectors.
Average offset prices remained flat in 2019, but with wide variance by type. Prices for offsets associated with Agriculture, Forestry and Land Use (AFOLU), sometimes referred to as Nature-Based Solutions and Natural Climate Solutions, for example, increased 30 percent, while prices for offsets from Renewable Energy decreased 16 percent.
Price and volume moved in opposite directions for these leading offset types. AFOLU volume dropped 28 percent and Renewable Energy volume surged by 78 percent.
Despite the lower volume, the market value of AFOLU offsets was more than twice that of Renewable Energy, and demand for offsets associated with forest management in developing countries (i.e., REDD+) remains especially strong.

Download the installment now.

Forward

About the EM Carbon Survey
Every year since 2006, Forest Trends’ Ecosystem Marketplace initiative has tracked, through its globally-recognized survey, what would otherwise be an opaque voluntary carbon market. This work has served as a consistent and comprehensive price discovery mechanism, while at the same time shedding light on the active project developers and intermediaries, thus answering fundamental questions about market dynamics, supply, and demand.

The information and insights presented in this installment is based on 152 organizations' responses to Forest Trends’ annual 2020 Ecosystem Marketplace Carbon Survey cycle, which is based largely on confidential carbon market transaction data and sentiments. This represents a 24 percent increase in total respondents from last year.

Over the coming weeks and months, Ecosystem Marketplace will provide additional installments of the State of Voluntary Carbon Markets 2020. Stay tuned!

With warm regards,

The Ecosystem Marketplace team

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