Carbon Credit Pricing Insights

The Carbon Credit Pricing Insights Module provides an in-depth analysis of current trends and factors influencing the pricing of carbon credits across various project categories in the VCM. This module is an essential resource for policymakers, investors, and other stakeholders to understand the dynamics of carbon credit prices and make informed decisions to optimize their pricing strategies and enhance market competitiveness.

Global Average Carbon Credit Prices by Project Category

*Average carbon credit prices by project category

Key Pricing Insights

Insights from recent trends in carbon credit prices

Forestry and land use

In the Forestry and Land Use category, the volume and value saw substantial reductions, dropping by 68% and 69% respectively, while the price decreased by 4%.

Specific Insights:

  • REDD+ credits experienced a 23% decrease in price due to delays in issuing new credits as Verra updated its methodology and increased buyer due diligence influenced by recent media scrutiny.
  • Prices for Afforestation-Reforestation and Revegetation (ARR) credits rose by 31%, and Improved Forest Management (IFM) credits increased by 11%, reflecting a growing interest in nature-based carbon removal credits.

Renewable energy

These projects mitigate carbon emissions by using renewable energy to displace fossil fuel consumption. Project types include electricity and heat generation using wind, solar, hydropower, geothermal energy, biogas from the decomposition of organic waste, and renewable biomass.

Specific Insights:

  • For the Renewable Energy credits, the volume plummeted by 69%, and the value fell by 71%, with a 7% decrease in price. This decline can be attributed to a drop in the supply of credits following a peak in new project registrations in 2020, resulting in reduced transaction volumes.

Key Carbon Credit Price Drivers

Project Category

This refers to the broad classification of the type of activities involved in generating carbon credits. Different types of carbon projects command different prices based on their perceived quality and effectiveness. For example, nature-based solutions like Afforestation, Reforestation, and Revegetation (ARR) and Improved Forest Management (IFM) projects saw an increase in price in 2023 due to growing interest in high-quality, nature-based carbon removals.

  • Different project categories saw varying price trends in 2023.
  • Forestry and Land Use credits maintained the highest average price at $9.72 per ton CO2e.
  • Agriculture credits saw the largest price decline, falling 41% to $6.51 per ton.
  • Energy Efficiency/Fuel Switching credits also declined significantly in price, falling 32% to $3.65 per ton.
  • Within Forestry and Land Use, REDD+ credit prices fell 23%, while Afforestation-Reforestation and Revegetation (ARR) and Improved Forest Management (IFM) prices rose 31% and 11% respectively.

Latest reports on global carbon pricing trends

Disclaimer : The pricing data and trends presented in this module are sourced from public databases, market reports, and proprietary analyses. These insights are indicative and subject to fluctuation based on market dynamics, regulatory changes, and project-specific variables. Users should independently verify this data before making financial or strategic decisions. This information is provided for guidance purposes only and does not constitute financial advice. ACMI disclaims liability for decisions made based on this data.