What lies ahead for voluntary carbon markets in 2023
- Media Manager
- Jan 25, 2023
- 1 min read
S&P Global - Commodity Insights
Published: January 25th, 2023
A quick glimpse at the price history of most types of voluntary carbon credits in 2021 and 2022 will reveal somewhat of a bell-shaped curve.
It's a shape that tells a very simple story: a large part of the value that carbon credits quickly gained in 2021 was slowly but steadily lost in 2022. It's a shape that leaves market players wondering about what would come next – and the same line could offer the answer.
Time for regulators to shine
Another section of the 2022 price curve brings us to an even more important factor to look at for 2023 projections.
In the autumn of 2022, as the UN Climate Change Conference, or COP27, approached, a new bearish trend appeared in the VCM.
After a few late-summer weeks of high hopes about new demand coming to the market, very much in line with what had happened the previous year during COP26, market players began to face a harsh reality. They started to realize that their expectations to see clear rules about carbon crediting mechanisms being set at the UN summit would not be met, and that – in the middle of this regulatory uncertainty – most buyers were choosing to delay their purchases.
This resulted in a slowdown of market activity and price losses seen across all segments.
