This issue of our Data and Insights brief covers the last quarter of 2020, a year that brought a number of challenges — but also opportunities — to the carbon markets. Travel restrictions due to COVID-19 slowed down the validation and verification of VCS projects in Colombia and subsequently resulted in a decrease in Verified Carbon Units (VCUs) issuances and retirements from these projects, though signals of recovery are strong.
Looking back on all of 2020, we saw a couple of early trends solidifying in Q4. 1) The domestic carbon tax is the primary driver of carbon market activity in Colombia: of the over 20,000,000 VCUs retired so far, more than 18,000,000 were retired for compliance purposes. 2) AFOLU projects continue to comprise more than half of all carbon projects in Colombia and are continually issuing about 98% of VCUs. REDD+ projects continue to constitute the vast majority (96.3%) of AFOLU projects.
The number of registered projects increased only slightly between Q3 and Q4/2020 (from 36 to 38), likely due to travel restrictions resulting from the pandemic.
The number of cumulative expected issuances from projects in Colombia has been slightly lower (22,317,176) than projected (32,016,851), and 2020 issuances have almost dropped to 2017 level, likely due to the above-mentioned delay in validation and verification of projects. However, Q4/2020 (746,715 VCUs) saw a fairly strong rebound in issuances from Q3 (435,555 VCUs). Issuances from AFOLU projects more than doubled in the same timeframe (from 305,115 VCUs in Q3 to 616,723 VCUs in Q4).
|Afforestation, Restoration, Reforestation||8|
*One VCU represents one tonne of carbon dioxide equivalent that was removed from the atmosphere or not emitted.
Greenhouse gas equivalencies for emission reductions and removals were calculated using the EPA Greenhouse Gas Equivalencies Calculator
|Project Type||VCUs||Percentage of Total|
ALM – Agricultural Land Management
ARR – Afforestation, Reforestation and Revegation
IFM – Improved Forest Management
REDD – Reducing Emissions from Deforestation and Forest Degradation
WRC – Wetland Restoration and Conservation