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Premium shift: buyers eager to invest in high-quality carbon credits

In the dynamic landscape of voluntary carbon markets (VCM), a recent report indicates a significant shift towards high-integrity credits, emphasising benefits beyond carbon mitigation.

Buyers eager to invest in high-quality carbon credits_Close up on a young tree seedlings_visual 1Close up on a young tree seedlings, Hongera Reforestation Project, DGB.

Market transactions within the VCM underscore a willingness among participants to pay a premium for superior credits. Despite facing growth barriers, a surge in demand for certified high-quality credits signals a transformative shift on the supply side.

Ecosystem Marketplace's (EM) latest report, State of the Voluntary Carbon Markets 2023, scrutinises data from 160 respondents, revealing a consolidation around committed buyers ready to pay a premium for top-tier credits. This marks a critical juncture for the VCM, emphasising market behaviour favouring integrity and quality.

Read more: The interconnected world of carbon: exploring key carbon market concepts

Interest in the VCM has spiked in recent years, with investments totalling $36 billion between 2012 and 2022. However, market dynamics in 2022 and 2023 show fewer transactions and buyers, coupled with a rise in average credit prices to $7.37 per tonne in 2022.

The report interprets the 2023 market conditions not as a stall but as a necessary regrouping before an anticipated acceleration, with buyers optimistic about a rebound, particularly focusing on high-integrity credits.

Additionally, the rise of quality nature-based credits and co-benefits plays a crucial role. Credits linked to nature-based solutions constitute 46% of the market share, with forestry and land-use projects experiencing a 75% price rise from 2021 to 2022.

Read more: Corporate leaders join VCMI to authenticate high-quality carbon credits

Buyers are increasingly seeking certifications for social and environmental co-benefits 'beyond carbon’, with a 78% price premium. Newer 'vintage' credits are also gaining traction, with buyers willing to pay more for recent and robust methodologies.

 

The aviation sector, through the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), contributes to quality improvements. CORSIA-related purchases in the VCM grew notably in 2022, signalling a deeper connection between compliance markets and the VCM.

As the VCM undergoes a necessary regrouping, the market is poised for an acceleration forward, with a spotlight on high-integrity credits driving the transition.

Aligning with our vision, DGB Group stands at the forefront developing premium nature-based solutions aimed at safeguarding and rejuvenating our precious natural surroundings. Our projects go beyond carbon mitigation, offering many additional environmental and socio-economic benefits. Our dedication revolves around spearheading initiatives in reforestation, afforestation, biodiversity restoration, and community empowerment, all geared towards creating a positive and lasting impact while generating top-tier carbon credits. 

Our commitment extends to empowering businesses, investors, and individuals to actively participate in preserving nature through engagement in the carbon market. DGB proudly presents a diverse portfolio of nature-based projects meticulously verified by rigorous industry-leading standards such as the Gold Standard and Verra’s Verified Carbon Standard.

By supporting our nature-restoration endeavours, you become an integral part of shaping a sustainable future. Your involvement not only aids in preserving the environment but also unlocks the vast potential of carbon markets, fostering a harmonious balance between economic benefits and ecological wellbeing. 

Learn more about DGB’s top-quality carbon credits and how they can benefit you

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