S&P Global Commodity Insights - Carbon Markets Daily

Carbon Markets Daily

March 14, 2023

Platts Industrial Pollutants CY was assessed stable on the day, following the movement in Platts Renewable Energy CY and Platts Methane Collection CY. The Platts Nature-Based Avoidance Current Year price was assessed stable on the day. About 25,000 mt VCS-CCB REDD+ ID 934 Mai Ndombe credits were heard bid at $7.25/mtCO2e and offered at $9.00/mtCO2e with a 2019 vintage. Platts had earlier heard that 2019 vintage credits were at a premium of $1-$1.05/ mtCO2e over 2018 vintage credits. It had also heard that VCS-CCB Gold certified REDD+ ID 1748 (Southern Cardamom) credits with vintage 2018 were at a premium of $4.50/mtCO2e toward the 2016 vintage. Platts also heard an indicative value for large volume VCS CCB certified REDD+ credits at $9.00/mtCO2e with a 2018 vintage. Platts Natural Carbon Capture was assessed stable on the day amid a lack of market activity. Platts Household Devices CY was assessed higher on the day. About 100,000 mt each of ID 5642 and ID 10790 Cookstoves credits with a 2021 vintage were heard offered at $8.30/mtCO2e from Kenya and Somalia. Platts had earlier heard that African credits were at a $1.75/mtCO2e premium over Indian ones. Platts is part of S&P Global Commodity Insights. Platts Americas MPC Daily Rationale Platts assessed the value of a Methane Performance Certificate on March 14 at 1.5 cents/MPC, unchanged on the day. Platts assessed Methane Collection credits unchanged on the day at $3.70/mtCO2e. Platts assessed CORSIA-eligible credits, or CEC, unchanged on the day at $2.50/mtCO2e. This rationale is relevant for assessments in the MPC market data category. This rationale applies to symbols and . Platts is part of S&P Global Commodity Insights. News UK pension company Scottish Widows calls for more transparency in voluntary carbon markets „ Says corporates need more incentives to invest in carbon credits „ Pensions schemes eye major pivot to ESG, reduce dependence on fossil fuels „ New report says financing gap for nature preservation can be cut via carbon markets UK pensions provider and insurance company Scottish Widows wants voluntary carbon markets in the country to be regulated due to the lack of sufficient quality standards, it said March 14. The company said the opacity of the VCMs represents a big barrier and it urged the UK government to do more to incentivize corporates to buy carbon offsets. “This [opacity] breeds mistrust, particularly as a number of bad actors have been exposed in the past. What could really shift the dial here is the establishment of a UK regulator for carbon offsets,” Scottish Widows said in its latest report, entitled “Nature

and biodiversity: the pensions imperative”. “This could set quality standards that corporations looking to do the right thing could trust, enabling them to allocate money with confidence in these offsets having additionality and really delivering on those climate and nature goals,” it added. Many of the UK’s pension schemes are looking to increase their involvement in the environmental, social and governance sector, and to reduce their exposure to oil and gas companies. In its report, Scottish Widows also said pension funds can lead the way on investment in projects that protect nature and wildlife. The financing gap for nature preservation projects can be reduced via voluntary corporate actions with money flowing into areas like peatland and soil restoration, forest and ocean conservation, it added. “Demand for good quality carbon offsets will only continue to grow and if these offsets are structured with nature-related co-benefits, then this becomes a win-win, helping to secure both decarbonization and nature preservation,” the report said. Credibility issues VCMs are currently facing questions about credibility. The efficacy of some carbon credits, especially nature-based offsets, have recently come under fire from media and academics questioning whether the programs represent genuine carbon reductions. This market is also undergoing a significant transition, with a suite of integrity and quality initiatives, expected to be announced in the coming months. The Integrity Council for the Voluntary Carbon Market will introduce high-integrity carbon credit labels in the third quarter of 2023, and it will publish its final Core Carbon Principles (CCPs) in March to create a more transparent, liquid, high integrity voluntary carbon market. Meanwhile, the Voluntary Carbon Markets Integrity Initiative (VCMI) is reworking a draft consultation aimed at bringing integrity to corporate claims made about the use of carbon credits. This intense scrutiny had a major impact on prices of and demand for nature-based carbon offsets, but the market has been recovering in recent weeks. Platts CNC, an assessment that reflects the most competitive nature-based carbon credit prices, was assessed at $2.40/mtCO2e March 14, up from the all-time low of $1.70/mtC02e Feb. 3. Platts CNC averaged $9.55/mtC02e in 2022, according to data from S&P Global Commodity Insights. —Eklavya Gupte Barriers remain to commercial CCS rollout in Europe, despite high carbon prices „ Economic models, tech risk present obstacles „ Some CCS projects clear with Eur100/mt CO2 price „ Only 30% of compliance CO2 price seen as bankable Carbon capture and storage developers say they still require state support to get projects up and running, despite record-high


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