Carbon Markets Showed Strong Growth in 2010

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According to John Adam, head of Carbon Investments UK portal, ‘2010 statistics showed very positive trends for investors in carbon credits, or those weighing up investment in carbon credits.’

2010 statistics showed very positive trends for investors in carbon credits, or those weighing up investment in carbon credits

Speaking on behalf of news portal, at the Carbon Expo in Barcelona, John Adam summarized figures recently published for 2010 on the international carbon markets. According to Adam, ‘2010 statistics showed very positive trends for investors in carbon credits, or those weighing up investment in carbon credits.’

As the largest annual event for the international carbon market, the Carbon Expo is now traditionally the venue where figures and analysis from the previous year are presented and dissected. Following a tough 2009 on the back of the global recession, especially for the voluntary carbon market, 2010’s statistics showed much reason for cheer.

‘Parties with concerns in investment in carbon credits should be very heartened by figures realeased by Bloomberg New Energy Finance and Ecosystem Marketplace,’ said Adam.

Overall, the international carbon market grew by 5% on 2009 levels, despite major stalling in the US meaning hopes of a federal cap-and-trade scheme again seem unrealistic in the next couple of years. This lead to the collapse of the Regional Greenhouse Gas initiative in the USA, which had accounted for 9% of the market in 2009. Trade in carbon credits generated by Clean Development Mechanism projects showed 1% growth, whereas the EU Emissions Trading Scheme showed no change in trading volumes. That report will be published on the portal on 07/14/2011 and will be available for download.

The major positive change in traded volumes of carbon credits was in the voluntary carbon market, which showed 34% growth in traded volumes compared to 2009.

Over the whole market, 6.9 tons of carbon credits were traded throughout 2010, compared to 7.7 billion tons in 2009.

The major cause of overall market growth in 2010, despite the loss of a large chunk of the US market, was the overall rise in average prices of carbon credits, by 17%. Average prices of carbon credits rose to $19.4 from $16.54. This, stated Adam, ‘would have delighted stakeholders of investment in carbon credits.’

Figures announced by Bloomberg New Energy Finance, showed that prices of carbon credits within the EU cap-and-trade scheme, grew by 6.6% over 2010. As the EU scheme comprises 80% of the overall global carbon credit market, this means that the remaining 20%, including other smaller compliance markets and the voluntary market, rose by 58.6% on average transaction values per unit.

The rise in unit prices for carbon credits compensated the drop in volume of transactions over 2010 and lead to the market increase of 5% in overall value, likely boosting investment in carbon credits over the coming year.

The prognosis for 2011 by Bloomberg New Energy Finance is also interesting for those interested in investment in carbon credits, with 15% growth on 2010 predicted. We will revise those numbers and an official report will be available for download from the portal on 08/01/2011.

‘According to Bloomberg,’ Adam explained, ‘the main reason for this will be much lower free allocations of carbon credits to be distributed from 2013 within the EU scheme. This will push demand for project based carbon credits, fueling carbon credit investment by large companies stock-piling at present cheaper prices over the next couple of years.’

Adam also highlighted the Californian state cap-and-trade market in carbon credits, which is due to come into force from the beginning of 2012. ‘This will become the second largest global carbon credit trading market globally, after Europe, and could even rival Europe within a few years.’

Also, Further developments within the US, as well as potential progress in carbon legislation in countries such as Australia and Japan, could mean that the world’s carbon markets could reach $2.4 trillion by 2020, according to estimates of Bloomberg New Energy Finance.

Adam concluded that the coming year and the next few, were set to be very interesting for parties with interests in investment in carbon credits. The industry has weathered the storm of global recession and very much appears to have come out stronger. The portal will held an discussion in London for the future of the carbon market on the 15th of July and only partners will be invited. Stay tuned.


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