We are pleased to share with you the second quarterly “Data and Insights Series” with detailed information about VCU issuances, retirements and project types. We published this information because we understood there was interest in seeing this type of aggregated data which also provides a good indicator of market activity, considering that the VCS Program is the most commonly transacted project standard.
We did hear from a number of stakeholders that the first quarterly report we published in December 2019 was a valuable resource and hope this update is equally, if not more, useful. As always, we welcome feedback and suggestions to make this an even better resource.
Main Takeaways
- Record issuances in 2019. 2019 was a record year for issuances, with the issuance of the 100 millionth VCU overall having occurred towards the end of the year. In the end, we issued 98.8 million VCUs in 2019, which was more than twice as many ever issued in a single year, indicating that climate action is increasing and that voluntary carbon offsets, including those from the VCS, are part of the action. While we hope that this is a sign of things to come, a single-year data point is not sufficient to base future trends on.
- Muted impact from the coronavirus pandemic, for now. We have not yet seen any impact of the pandemic on the trading of Verified Carbon Units (VCUs) as issuances have continued a slight upward trend from last year (42,822,117 VCUs versus 41,013,130 in Q4 of 2019). That, of course, may change in the short- to medium-term as the economic impacts of the pandemic work their way through the system. Nevertheless, we do expect that, in the long run, climate action will resume its pre-pandemic growth, especially considering that the coronavirus crisis has increased the recognition that we need to act swiftly to avoid crises that can spiral out of control and cause great economic damage and social upheaval which climate change clearly has the potential to do.
- Increase in VCUs originating from AFOLU (Agriculture, Forestry and other Land Use) projects continues. Ever since 2016 (see line graph below), AFOLU issuances have outpaced issuances from non-AFOLU projects. Moreover, that difference is growing, with AFOLU issuances representing 72% of total issuances in 2019, as opposed to 38% in 2016. suggesting that Natural Climate Solutions are continuing to gain strength. While the issuances from AFOLU projects in Q1 were slightly lower than in Q4 of 2019, the overall trend is still an increasing one.
- Impact from CORSIA unclear. In March, the VCS Program was accepted as one of six standards that are eligible to supply emission reduction units for compliance under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). So far, we have not seen a discernible impact on VCU issuances that could be attributed to CORSIA, although we expect that to change in due course. If and when we see such changes coming through we will consider providing updates on those numbers.
The year 2020 will bring more changes than any of us ever expected. How exactly they will affect the carbon markets remains to be seen, although we do hope you can rely on the VCS Quarterly Updates to keep you informed along the way.
VCS Data and Insights – Q1/2020
Projects
1,941
total projects
309
projects in the pipeline
Summary Totals to Date
VCU ISSUANCES* (Total To Date)
VCUs available for sale
*One VCU represents one tonne of carbon dioxide equivalent that was removed from the atmosphere or not emitted.
453,036,479
VCUs
97,875,617
cars taken off the road
for a year
188,311,059 VCUs issuances from AFOLU* projects, all years
264,725,420 VCUs issuances from Non‑AFOLU* projects, all years
*AFOLU – Agriculture, Forestry and Other Land Use
AFOLU Issuances
Non-AFOLU Issuances
Total Issuances
VCU Issuances from AFOLU* Projects To Date
VCU Issuances by Region To Date
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
*AFOLU – Agriculture, Forestry and Other Land Use
Retirements to Date
VCUs that have been purchased and taken off the market forever; a retired VCU represents a carbon offset.
253,853,172
VCUs
84,842,535 VCUs from AFOLU* Projects
169,010,637 VCUs from Non‑AFOLU* Projects
*AFOLU – Agriculture, Forestry and Other Land Use
Latest Trends
Issuances for Q4 2019
41,013,130
VCUs
19,309,949
VCUs from AFOLU* Projects
OF WHICH
12,810,389
VCUs from REDD Projects
Issuances for Q1 2020**
42,822,117
VCUs
15,474,703
VCUs from AFOLU* Projects
OF WHICH
12,744,247
VCUs from REDD Projects
Retirements for Q4 2019
17,988,317
VCUs
Retirements for Q1 2020**
14,312,540
VCUs
** As of 31 March 2020
*AFOLU – Agriculture, Forestry and Other Land Use