Nature-related carbon credits soar as prices fall in energy sector, Xpansiv report

Xpansiv’s voluntary carbon credit trading data showed a significant price divergence for nature-based and technology-based carbon credits. The report comes from Xpansiv Data and Analytics, which offers an extensive database of spot companies and indicative offers, offers and transaction data.

Xpansiv provides comprehensive market data from CBL, the world’s largest spot exchange for organic commodities. It provides daily and historical data on carbon credit offers, offers and transactions, compliance and voluntary renewable energy certificates and Australian Carbon Credit Units (ACCUs) traded on the CBL platform.

The exchange recently secured a large capital raise from Aramco Ventures to further enhance its environmental markets infrastructure solutions.

Spot data is further enriched with futures prices from top market intermediaries, along with aggregated registry statistics and ratings from leading suppliers.

Nature-based lending is growing while prices in the energy sector are falling

Last week, large blocks of Nature Group Eligibility (N-GEO) meeting the Verified Carbon Standard (VCS) and nature credits from the Climate Action Reserve (CAR) drove the 20-day moving average of AFOLU (agriculture, forestry and other) from the latest vintage Land Use) to $12.05, up 125% week over week. Conversely, a significant block of Asian revolving credits caused the average price in the energy sector to fall by 60% to $0.76.

These blocks accounted for the majority of the 316,124 metric tons traded on the CBL last week. This amount consists of 224,730 nature loans and 91,394 energy loans. CME Group carbon futures also reflected this trend, selling 584,000 tonnes through CBL N-GEO and 284,000 tonnes through CBL GEO futures.

Specific credit transactions on CBL included the 2019 vintage:

• VCS 1477 Katingan Credits for USD 6.00,
• ACR 556 Industrial Process Credits @ $2.85,
• ACR 658 credits at $2.30 and
• Vintage 2020 VCS 1753 Indian Solar Credits @ $1.25.

Who runs the CBL REC markets?

Last week, a $9.50 offer for 5,000 tonnes of old VCS afforestation, reforestation and revegetation (ARR) credits from Uruguay was republished for 2019. New and renewed VCS and Gold Standard credit offers for renewable energy and REDD+ ( Reducing emissions from deforestation and forest degradation) ranged from $1.00 to $2.75.

Project-specific loan offers at CBL

REC trading activity on CBL was small, but included larger blocks of bilateral PJM trades settled through the exchange, as well as smaller screen-matched PJM and NEPOOL trades.

• Virginia Loans: Virginia 2024 Loans traded at $0.25, closing the week at $35.25.
• New Jersey Solar Loans: More than 1,400 2023 solar credits in New Jersey settled at $207.50, up $1.50 from last week’s close, and an additional 1,500 credits settled in reported trades.
• New Jersey Class 2 Loans: 2024 355 REC fetched $37.50.
• NEPOOL Credits: 189 Massachusetts Class 2 waste credits totaled $31.50.

In related news, the White House released new guidelines for voluntary carbon credits to promote high-quality emissions reductions and support nature-based projects and carbon removal technologies.

Xpansiv data highlights a stark contrast in the carbon credit market: nature-based credits are seeing significant price increases, while energy sector credits are seeing sharp declines. This discrepancy highlights the growing demand for high-integrity, nature-based solutions in a voluntary carbon market.

As companies look to achieve their net zero targets, understanding market dynamics will be crucial to making informed investment and sustainability decisions.