back to the future: state of the voluntary carbon markets 2011

Back to the Future:State of the Voluntary Carbon Markets 2011

PREMIUM SPONSOR SPONSORS

2

• Market-wide, comprehensive survey of the OTC voluntary carbon markets

• Collected data from offset suppliers, registries and exchanges • Agnostic on credit quality• Tracks transacted credits as they pass hands in market – so

transaction volume, not market size • Another 261 suppliers did not transact credits in 2010, were

no longer selling voluntary carbon credits or were no longer in business.

This year, a record 284 respondents from 38 countries responded to our survey

3

34% of respondents from US, suppliers from developing countries doubled (2009: 29; 2010: 58)

US

UK

Can

ada

Aus

tralia

Ger

man

yB

razi

lFr

ance

Mex

ico

Indi

aS

witz

erla

ndIta

lyN

ethe

rland

sC

hina

Gua

tem

ala

Sou

th A

frica

Japa

nTu

rkey

Chi

leB

oliv

iaIre

land

New

Zea

land

Pan

ama

Per

uS

ierra

Leo

neS

inga

pore

Sw

eden

Uga

nda

Uru

guay

Por

tuga

lA

rgen

tina

Col

ombi

aD

enm

ark

Indo

nesi

aIs

rael

Ken

yaLu

xem

bour

gM

aurit

ius

Rep

ublic

of K

...N

ot S

peci

fied

0

10

20

30

40

50

60

70

80

90

100 94

2522

1812 10 8 7 6 6 5 5 4 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1

7

Source: “State of the Voluntary Carbon Markets 2011”, Ecosystem Marketplace and Bloomberg New Energy Finance

Survey Participant Location

4

Transaction volumes increased 34% in 2010

Source: “State of the Voluntary Carbon Markets 2011”, Ecosystem Marketplace and Bloomberg New Energy Finance

pre-2002

2002 2003 2004 2005 2006 2007 2008 2009 2010 -

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

200,000,000

43,930,141 10,676,503 6,497,386 10,270,208 10,846,916 17,508,684

45,057,834 60,948,800 54,783,797 68,727,363

- 2,251,400 1,446,800 10,272,400

22,937,500

69,236,800

41,417,000 1,609,400

- -

105,000.0

228,172.0

1,817,360

1,689,893

59124900

Exchanges (other) OTC CCX - single sale (outlier) CCX OTC

Historic Volume in the Voluntary Carbon MarketsMtCO2e

44

11 713 12

28

68

130

98

131

5Source: “State of the Voluntary Carbon Markets 2011”, Ecosystem Marketplace and Bloomberg New Energy Finance

Historic Value in the Voluntary Carbon MarketsMtCO2e

pre-2002

2002 2003 2004 2005 2006 2007 2008 2009 2010 -

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

180,113,577 43,773,663 26,639,284 42,107,852 44,472,356 71,785,606

274,852,785

447,098,407 353,903,326

412,528,623

30526.6666666667

2552730.252928900.638278755

72354781.25

306719024

49824450191,220.0640500

1673787.46564303

11614584.5446271

10

OTC CCX - single sale (outlier) Exchanges (other) CCX OTC

Average OTC prices declined slightly to $6/tCO2e, 98% of value from OTC transactions

180

44 27 45 47 110

348

755

415424


Historic Transacted and Retired VolumesMtCO2e

The main goal is credit retirement, which has largely stayed level since 2007

pre-2002 2002 2003 2004 2005 2006 2007 2008 2009 2010 -

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

43,930,141

10,676,503 6,497,386

10,270,208 10,846,916 17,508,684

45,057,834

60,948,800 54,783,797

68,727,363

7,308,606 4,118,895 3,798,528 4,997,608 7,619,178 6,589,626

13,433,474 15,766,595 14,002,491 12,661,883

22528916.77521332080.042

26070444.0460553

31990920.9008774

Sold OTC Retired Proxy retirement figure


Transaction Volume by Project Type

Land-based credits sequester 46% of OTC market share

29%

16%

11%6%

6%

6%

5%3%2%

2%2%

2%

11%REDD/Avoided ConversionLandfill methaneWindAfforestation/ ReforestationRun-of-river hydroODS (US-based)Improved Forest ManagementAgricultural soil BiomassLivestock methaneForestry (general)Energy EfficiencyOther

Other - non-descript 3%

Wast water 2%

Fuel switching 1%

N2O 1%

12 types <1%

“other” land-based 1%

Large Hydro 1%


Historic Transaction Volume by Forest Carbon Project Type

REDD methodologies closing gap on supply and demand for conservation projects

pre-2002 2002 2003 2004 2005 2006 2007 2008 2009 2010

0

2

4

6

8

10

12

14

16

18

Agro-forestry

Ag soil

IFM

AR

REDD


Transaction Volume by Location and Project Type

Latin American forestry saw unrivaled growth09 10 09 10 09 10 09 10 09 10 09 10 09 10 09 10 09 10

US Latin America

Asia Europe (non-EU)

Africa Canada Oceania EU Not spec-ified

0

5000000

10000000

15000000

20000000

25000000

Other & mixed/ not specified

EE & Fuel-switching

Methane

Renewable energy

Forestry/ land-use

MtCO2e


Transaction Volume by Vintage

Intensified demand for future vintages

pre-2005 2005 2006 2007 2008 2009 2010 2011 2012 2013; post-

2012 ('09 data)

2014 post-2014

0

3000000

6000000

9000000

12000000

15000000

415,057 352,976 503,2771,744,911

3,084,264

10,080,436

1,842,7881,541,943699,951

1,947,531 1,333,100 461,838

1,250,570 1,471,346 2,709,690

4,909,948

11,740,351

4,501,025 3,385,904 2,934,931

1,663,156

3,166,052

MtCO2e


Market Share by Standard

REDD stacked the odds in favor of VCS and CCB Standards

34%

19%16%

8%

5%

3%3%

2%2%

9%

Verified Carbon Standard (VCS)

Climate, Community and Biodiversity Standard (CCB)

Climate Action Reserve (CAR)

Gold Standard

BMV Standard

Forest Carbon Standard International

Chicago Climate Exchange (CCX)

American Carbon Registry (ACR)

ISO-14064

Other

Other - non-descript 6%

Plan Vivo 1%

CDM 1%

8 stds < 0.1%NZ PFSI 0.3%

SOCIALCARBON 1%


Average Price by Standard

Credit prices highly stratified across (and within) standards

US$/tCO2e

VE

R+

Gre

enho

use

Frie

ndly

Car

bonF

ix

Inte

rnal

Gol

d S

tand

ard

Non

e

Gre

en-e

Clim

ate

CD

M

Pla

n V

ivo

NS

W G

GA

S

BM

V S

tand

ard

Oth

er

ISO

-140

64

FCS

I

Alb

erta

CA

R

SO

CIA

LCA

RB

ON

NZ

PFS

I

VC

S

EP

A C

L

CC

B

AC

R

CC

X

0

10

20

30

40

50

Volume-weighted average price Maximum transaction price Minimum transaction price


PoAs and grouped project guidance a prominent feature of most major certification programsTransaction Volume by PoA or Grouped Project Guidance Utilized

36%

24%

14%

6%

5%

5%5%

2% 0.02%

VCS Grouped project

BMV Standard

Other

ACR Guidelines

CCX Pooled project

GS PoA

CDM Large-scale PoA

CDM Small-scale PoA

Plan Vivo system


Registry market share mirrored standard usage, with Markit still in the lead

Transaction Volume by Registry Utilized Registered vs. OTC Transacted Volumes

50%

17%

10%

8%

8% 3%2% 1% 1%

MarkitNYSE Blue VCSGS VER (NYSE Blue)CAR (NYSE Blue)CDC VCSACRCCXCDM/JIRemaining Markit NYSE

Blue VCS

GS VER (NYSE Blue)

CAR (NYSE Blue)

CDC VCS

ACR CCX CDM/JI -

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

14,153,484

8,951,193

2,678,915

7,890,136 4,262,637

0.2 948,479 0

21,631,713

7,560,352 4,372,303 3,555,284 3,406,490

1,355,000 929,819 0.4

Registered Sold


Mostly voluntary buyers for-profit, motivated by credit retirement – led by the EU

Transaction Volume by Type of Buyer Transaction Volume by Customer Location

44%

22%

19%

5%

3% 1% 1% 1% 0.5%3%

Business-for-profit (retirement, voluntary)

Business-for-profit (resale to voluntary buyers)

Business-for-profit (end-use, pre-com-pliance motive)

Business, for-profit (motivation unknown)

Business-for-profit (resale to pre-com-pliance buyers)

Individuals (retirement)

NGOs/ non-profit organization (retirement)

Governments (retirement, voluntary)

NGOs/ non-profit organization (resale)

Other/ not specified

41%

37%

8%

5%4%

2%1%0%

EUUSLatin America AsiaCanadaOceaniaEurope (non-EU, incl. Turkey)Africa (incl. Egypt)


Voluntary carbon market participants “cautiously optimistic” about 2011 and beyond

Supplier-Projected Market Growth for the Voluntary Carbon Markets

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1,800,000,000

Historic Growth Projected Growth (by 2008 participants)Projected Growth (by 2007 participants) Projected Growth (by 2009 participants)Projected Growth (by 2010 participants)

MtCO2e

back to the future: state of the voluntary carbon markets 2011

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