Voluntary Carbon Market Forecast Outlines Hype and a Well Stocked Surplus

The Voluntary Carbon Market is most likely set for the decade with a well-stocked surplus and gradual price trajectories - cCarbon.info environmental commodities forecasting firm has found in a report released today.

Based on detailed sectoral retirements data tuned by corporate pledge sign-ups, the forward demand for voluntary offsets is under question - particularly at the levels hyped up to recently by consultancy companies.

“Even under the most aggressive demand scenario, a marginal net surplus of offsets still remains through to 2030”, explained cCarbon’s offsets lead Harry Horner, “there’s been a lot of transaction and speculative demand to pump the markets over recent years, but the real question remains behind actual retirements demand.”

On the supply-side, the model scenarios firstly vary depending on the outcomes and adoption of recommendations of the Integrity Council (IC-VCM). There’s a ’toothless’ scenario whereby the status-quo on additionality is continued, and a strict scenario where questionable offsets are removed from the supply pool. In both cases versus a baseline demand, a 2030 surplus remains. The effects of differing Article 6 responses by various countries are also examined.

Whilst a general market surplus is persistent across the forecast research, “the important qualification and development of is that the VCM is not really a single market nor a single commodity, it is a loose grouping of sub-markets and a broad asset class.” said Hary Horner, “Whilst we see a persistent aggregate market surplus, the Demand-Supply balance for the different sub-markets (removals vs. avoidance, nature vs. technology etc.) paint starkly contrasting pictures, and lead to equally contrasting prices. This is where research will head into the future.”

Download the report here: https://www.cCarbon.info/insight-report/?ID=29

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Mafer Barrera

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