Global Carbon Offsets Predicted To Grow 20%

February 25, 2009

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In 2009, the global carbon offset market is expected to grow 20 percent in terms of volume, predicts Point Carbon, a provider of advisory services for the energy and environmental markets.

Point Carbon forecasts that 5.9 gigatons (Gt) of carbon dioxide equivalent (CO2e) will trade this year, compared to 4.9 Gt in 2008, according to its recent report—Carbon Market Analyst: Outlook for 2009. The increase represents stabilization near the transaction volumes seen in the second half of 2008 and indicates a leveling off in terms of volume traded.

The global CO2e market this year will be worth $79.7 billion, down 32 percent compared to $117 billion in 2008.

The Regional Greenhouse Gas Initiative is expected to see 339 metric tons of CO2e traded this year, up from 71 metric tons in 2008, giving RGGI a 6 percent share in the global carbon market by year-end. The increase is attributed to the fact that this year saw the beginning of RGGI’s first compliance, with attendant higher auctioning volume and an expected strong growth in secondary-market activity.

The report finds the European Union’s Emissions Trading maintaining its dominant position as the world’s largest carbon market with a 24 percent increase in trade over last year, to 3.8 Gt. However, the value of the EU ETS market, like the global carbon market as a whole, will drop significantly to $58 billion, a reduction of 33 percent on 2008.

Although prices for carbon offsets in a voluntary markets have dropped due to the recession, market participants and analysts say the market is surviving, with buyers focusing more on quality of the offsets instead of the quantity.

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