We are pleased to share with you our quarterly update of information about project types, issuances, and retirements under the Verified Carbon Standard (VCS) Program. Up-to-date data and analysis will give buyers and sellers, as well as project developers and policymakers, important information, and we therefore started to provide these updates late last year (the inaugural issue covered Q4/2019).
We did want to mention that it can be difficult to identify trends based on quarterly data. This is even more true at this point in time when the coronavirus has completely reshaped life as we know it and has strongly impacted the global economy.
One question weighing on many people’s mind is how the coronavirus pandemic is affecting carbon offsetting, and whether it will result in decreased activity on the voluntary carbon markets. A look at the data shows that there is not yet a conclusive answer to that question.
2020 got off to a huge start, with Q1 seeing record issuances. Q2, however, saw significantly fewer issuances (a 63% decline), but a deeper dive reveals some interesting facts. For example, both May and June 2020 saw the second-highest issuances when compared to the same months in previous years. In addition, the previous two quarters (Q1/2020 and Q4/2019) represented the largest volumes of VCU issuances historically, which means that they set an unusually high bar to be used in any comparison.
As of 30 June, there were 317 projects in the pipeline, an indicator that project developers and proponents alike have an optimistic outlook on market activity and their ability to sell issuances from their projects once they are registered.
Q1 and Q2 of 2020 saw more non-AFOLU issuances than AFOLU issuances. This is a deviation from a trend we have seen since Q1 of 2017 where AFOLU issuances have been consistently higher than non-AFOLU issuances.
*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
Region | Projects | Percentage of Total |
---|---|---|
Asia | 1,037 | 62.9% |
North America | 110 | 6.7% |
South and Central America | 248 | 15% |
Oceania | 8 | 0.5% |
Africa | 193 | 11.7% |
Europe | 53 | 3.2% |
Region | VCUs | Percentage of Total |
---|---|---|
Asia | 260,668,452 | 56.4% |
North America | 28,618,648 | 6.2% |
South and Central America | 101,301,457 | 21.9% |
Oceania | 12,936,112 | 2.8% |
Africa | 50,475,030 | 10.9% |
Europe | 7,903,921 | 1.7% |
Region | Projects | Percentage of Total |
---|---|---|
Asia | 62 | 32.5% |
North America | 2 | 1% |
South and Central America | 64 | 33.5% |
Oceania | 12 | 6.3% |
Africa | 51 | 26.7% |
Region | VCUs | Percentage of Total |
---|---|---|
Asia | 53,153,802 | 23.4% |
North America | 5,546,867 | 2.4% |
South and Central America | 82,011,086 | 36.1% |
Oceania | 1,971,563 | 0.9% |
Africa | 49,808,753 | 21.9% |
Europe | 35,000,000 | 15.4% |
Type | Projects | Percentage of Total |
---|---|---|
WRC | 1 | 0.5% |
ALM | 1 | 0.5% |
REDD | 76 | 41.3% |
IFM | 20 | 10.9% |
ARR | 86 | 46.7% |
Type | VCUs | Percentage of Total |
---|---|---|
WRC | 17,843,711 | 9.3% |
ALM | 325,825 | 0.2% |
REDD | 156,923,226 | 81.5% |
IFM | 5,446,225 | 2.8% |
ARR | 11,953,084 | 6.2% |
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
While the information presented in this update leaves a number of questions open, we do have some clear indicators that, at least for the time being, the carbon markets seem to be robust. The reported number of VCUS issuances and projects in the pipeline are two important signals, as are the number of statements from leading companies (Shell, Delta Airlines, Amazon, Microsoft) reiterating their climate and sustainability commitments.