Data snapshot: Pricing on the voluntary carbon market

The credits generated from carbon offset projects with associated environmental and/or social co-benefits command a significant price premium, according to a report from Ecosystem Marketplace.

The report, published in November 2023, is the latest in EM’s annual reports on the voluntary carbon market. To compile it, EM collects information from a network of over 270 respondents – spanning project developers, investors and intermediaries from over 40 countries – on over-the-counter and exchange/trading platform carbon credit sales for both nature-based and technological carbon projects.

Across the whole market, the average price of a carbon credit rose significantly (82 percent) from 2021 to 2022, from $4.04 to $7.37. This price fell slightly in the first 11 months of 2023 to $6.97. In particular, afforestation, reforestation and revegetation credits dramatically rose in value, having almost doubled in price in the period of 2021-23.

Credits generated from nature-based solutions have commanded an average price of $8.86, more than twice that of technology-based credits since 2021 ($3.93).

Project developers can choose from several credit issuers. Verified Carbon Standard is the largest issuer of carbon credits, followed by the Clean Development Mechanisms and then Gold Standard. Gold Standard credits commanded the highest price in 2021. VCS credits were the most highly valued in 2022 and up to November 2023.

Although most standards saw a decrease in transaction volume for their credits, the volume of reported Gold Standard credits transacted grew 10 percent. The report also notes that alongside the large issuers, there is a number of smaller, localised standards in the market.

Projects associated with additional environmental and/or social benefits are consistently able to command a higher price for their credits. Buyers of Verra’s VCS credits are often willing to pay more for projects with certifications from the Climate, Community & Biodiversity Standards (CCB), SD VISta, and Social Carbon, per the report. Such projects had a 78 percent price premium in 2022.

Projects developers can also align their projects with the UN Sustainable Development Goals. This project commanded an even larger price premium of 86 percent in 2022.