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Carbon Prices and Voluntary Carbon Markets decline in 2023, what is next 2024

The year 2023 marks a pivotal moment in the volatile journey of the carbon credit market. Once hailed as a cornerstone of corporate climate action, voluntary carbon markets are now grappling with a crisis of confidence and a significant downturn in price and demand.

A Rapid Rise and Troubling Slowdown

Voluntary carbon markets (VCMs), a key tool in the global fight against climate change, experienced exponential growth from 2019 to 2021. 

voluntary carbon market

As seen above, VCM credits jumped by 86% in 2021 compared to 2019 level. This surge was fueled by escalating corporate net-zero commitments and optimistic forecasts about the market’s potential size.

For instance, Citibank committed to reach net zero emissions by 2050, while using carbon credits to tackle unavoidable emissions. One of the world’s largest biopharmaceutical companies, Pfizer, also pledged to achieve net zero emissions by 2040. The US’ biggest utility, Pacific Gas and Electric (PG&E), also aimed at hitting net zero by 2040 while reducing Scope 1 and 2 emissions by 50% from 2015 levels by 2030. 

However, 2022 witnessed a stark slowdown in the VCM’s growth, a trend that continued into 2023. Various factors, including the increasing complexity of market mechanisms and the role of carbon credits in broader sustainability strategies, have contributed to this decline​​.

The Offset Decline: An Erosion of Confidence

Several high-profile corporations, such as Shell, Nestlé, EasyJet, and Fortescue Metals Group, have recently retreated from carbon offset schemes. This withdrawal stems partly from growing skepticism about the effectiveness of these projects, with concerns about their actual climate benefits and accusations of greenwashing. 

  1. Shell: The MIT Technology Review reported that corporations, including Shell, announced they were backing away from offsets or the claims of carbon neutrality that relied upon them. This shift reflects a broader trend of companies moving away from credits that simply claim to prevent emissions, particularly in light of increasing awareness about the challenges in proving the actual environmental impact of these projects​​.
  2. Nestlé: Reuters detailed Nestlé’s decision to move away from investing in carbon offsets for its brands, such as KitKat, to focus more on programs and practices that help reduce greenhouse gas emissions within their own supply chain and operations. This change is part of their strategy to reach their net-zero ambitions, indicating a shift from offsetting to direct emission reductions​​.
  3. EasyJet: According to the MIT Technology Review, EasyJet was mentioned as another corporation that had decided to wind down its offsetting program. Instead, EasyJet is now focusing on cutting emissions from its operations, signaling a shift in strategy towards more direct measures of reducing environmental impact​​.

A significant decrease in demand for offsets was observed, with estimates suggesting a 25% decline from 2021 levels by the end of 2023​​.

Carbon Price Collapse

The downturn in demand has had a dramatic effect on prices. The Xpansiv market CBL, the world’s largest spot carbon exchange, saw prices of carbon offsets fall by over 80% in an 18-20 month period.

historical standardized contract prices

This price decline reflects the broader challenges facing the voluntary carbon market, including questions about the actual environmental impact of the credits and the integrity of projects claiming to offset emissions​​.

While the VCM prices have been hit, the decline in NGEO (Nature-Based Global Emissions Offsets) prices stands out due to the premium they were trading at over the other offsets last year. With increasing scrutiny on forestry projects, NGEO prices sharply dropped from around $15 in June 2022 to $1 in June this year.

It even declined to below $1 at the time of writing. 

NGEO prices falling 2022-2023

One major reason for the downward trend of NGEOs was the tough macroeconomic environment, causing stagnation in demand in 2022. Moreover, the poor outcome for the VCM at COP27, which carries over at the recent COP28, further casted doubts on how carbon offsets fit in corporate net zero plans.

Mark Kenber, VCMI’s Executive Director, commented that though there are many encouraging developments on carbon markets at COP28, agreements “fell short of the mark”. He further stated that:

“For the market to fully develop in the next two years, policymakers can draw on the foundational work of the VCMI and IC-VCM, developing high-integrity VCM and Article 6 markets that deliver the finance that makes ambitious global action possible.”

Over in compliance markets, the EU carbon prices have broken records in February this year, surging past 100 euros. But the EU allowance prices also dipped back to its low levels this month at 78 euros, close to its November 2022 average price. 

The region, which has the largest carbon market EU ETS, plans to phase out its free carbon allowances while gradually phasing in its newly introduced carbon tax, known as the Carbon Border Adjustment Mechanism. CBAM will ensure that companies operating inside and outside the bloc remain on the same page in terms of carbon pricing and environmental impact. 

Following the EU footsteps, the UK is also set to launch its own CBAM version. It aims to ensure that imported goods from carbon-intensive industries like iron, steel, and cement face fair carbon prices. 

A couple of African nations are also gearing up to participate in the carbon arena. New carbon credit exchanges are created in Zimbabwe and Tanzania while Zambia and Kenya have plans to do the same. 

Several countries in Asia are also joining the carbon market bandwagon. Indonesia had launched a carbon credit trading market through IDX as part of its 2060 net zero goal. Japan’s first exchange-based carbon market opened in October this year.

Amid all these, the future of carbon markets now stands at a critical juncture. They face the challenge of regaining credibility and functionality amidst growing scrutiny and regulatory changes. How these markets evolve in response to these challenges will significantly impact their role in global climate strategies.

The Inflection Point: What’s Next for Carbon Prices and Trading?

Not all carbon news is grim here in 2023.

On Dec 13th, 2023, Xpansiv’s CBL spot exchange hit a daily trading volume record of 2.13 million tons of carbon credits, signalling robust corporate engagement in carbon offset markets. This surge aligns with the final day of COP28, reflecting an uptick in year-end corporate purchases for sustainability goals. 

New transparency requirements in the U.S., Europe, Australia, and California are driving this demand, pushing companies to disclose more about their carbon offset activities.

Allister Furey, CEO and co-founder of Sylvera, noted the fact that regulators are now seeing the critical role of carbon credits in financing the net zero transition. He further said that:

“Disclosures at every step of the carbon journey and for all involved stakeholders will become increasingly important. From the SEC’s coming climate disclosure rules to California’s AB1305, there are significant incoming regulations which should dramatically improve data availability in net zero–and we will begin to see the price of carbon ripple throughout value chains, slowly but surely.”  

Since 2020, CBL has traded over 300 million tons, dominating over 95% of the global spot exchange-traded carbon offsets. The record day underscores a heightened market activity during the UN’s COP event.

Meanwhile, the Compliance Credits market has not only attracted immense investment dollars – especially in carbon capture projects – but countries like Canada and the UK are setting higher and higher compliance prices.

NASDAQ Enters the Carbon Credit Market Arena

The NASDAQ Exchange, recognizing the growing importance and potential of the carbon credits market, has recently launched an innovative technology to revolutionize the industry. This new system, aimed at digitizing the issuance, settlement, and custody of carbon credits, is set to enhance the scalability of this nascent market. 

Nasdaq’s approach uses smart contracts for secure transactions and promises to bring much-needed standardization and liquidity to attract diverse investors​​​​.

Moreover, Nasdaq’s collaboration with Climate Impact X (CIX) marks a significant stride towards developing the global carbon market. This partnership will power CIX’s spot exchange for quality carbon credits, intending to improve price transparency and liquidity in the voluntary carbon credit market. 

Addressing the inefficiencies and inconsistencies in the market, this move by Nasdaq and CIX is poised to create a more resilient and scalable trading environment, demonstrating Nasdaq’s commitment to pioneering market transformations in the carbon credit sector​​.

It’s clear that change is in the air. Companies are not just looking to buy credits; they’re looking to buy credibility and real impact. And as the market matures, it’s becoming more about quality than quantity.

The post Carbon Prices and Voluntary Carbon Markets Faced Major Declines in 2023, What’s Next for 2024? appeared first on Carbon Credits.

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Designing an Insetting Program: A Step-by-Step Playbook for Procurement

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Insetting program design starts with your supplier map. The carbon claim comes much later.

Consider a coffee procurement team that funds a farm intervention before checking its sourcing data. The supplier aggregates coffee lots from several regions. The buyer lacks farm-level traceability. Another purchaser expects to report the same outcome. A more attractive project brochure solves none of these problems.

If the distinction between a value-chain intervention and a purchased credit is still open, read CCC’s Insetting vs Offsetting guide before you set the brief.

Insetting program design begins with the purchasing relationship and works outward. You need to decide 1) where an intervention belongs, 2) what business problem it addresses, 3) who pays for it, 4) how results will be measured, and 5) what the evidence will let you say about them. This five-step playbook turns that sequence into a procurement plan.

Step 1: Insetting program design starts with supplier mapping

Start with the commodities that matter most to your Scope 3 inventory and sourcing continuity. Ask finance for spend by supplier, sustainability for the emissions baseline, and category managers for origin and volume records. Then identify which suppliers can trace material to a jurisdiction, sourcing region, producer group, or individual land-management unit.

The level of traceability affects what you can account for. Under the GHG Protocol Land Sector and Removals Standard, the spatial boundary for purchased land-based products depends on the traceability associated with each volume. Farm-specific factors or removals require physical traceability through an acceptable chain-of-custody model. A contract with a tier-one trader, by itself, does not establish a link to the farms behind its deliveries.[1]

Build a first-pass table with five columns: commodity and annual volume; supplier and origin; current traceability level; land-use and production risks; and the business owner who can change the purchasing terms. Mark missing data plainly. A blank cell is cheaper to fix before a program starts than after a claim is drafted.

If your company sets an SBTi Forest, Land and Agriculture target (FLAG), keep its land-related target boundary separate from energy and industry emissions. The current FLAG guidance also requires relevant companies to assess primary deforestation-linked commodities in their value chains.[2]

Step 2: Choose a commodity and jurisdiction for a pilot

Select one supply corridor where the sourcing connection can be established and procurement has a reason to stay. A useful pilot has repeat purchases, suppliers willing to share records, an intervention matched to a diagnosed problem, and a defined plan to measure the result. Carbon potential alone is a poor selection rule if the supplier cannot deliver the crop your business needs.

Compare candidate regions on land-use risk, supplier concentration, local rights and tenure, the availability of baseline data, and exposure to drought, erosion, or forest conversion. Check the relevant legal requirements separately. A nature project does not satisfy a due-diligence obligation merely because it has a carbon method attached.

Consider a coffee buyer sourcing from two districts. In the first, producer-group records identify the farms, while recent dry seasons have increased rejected green coffee lots. In the second, deliveries pass through several intermediaries and farm origins are unknown. Pilot shade management in the first district, with local agronomic advice and quality checks built into the plan. The buyer can trace purchases there and test the intervention against a defined sourcing problem.

Use a short decision memo to record why the selected corridor beats the alternatives, what remains uncertain, and what would stop the pilot. That memo is the first control against a project drifting toward whatever happens to photograph well.

Step 3: Design the supplier engagement and commercial model

The intervention needs an owner on each side of the contract. Decide who supplies planting material or training, who maintains the practice, who bears the cost if a harvest disappoints, and how long the buyer expects to purchase from participating suppliers. Where smallholders participate, budget cash flow and technical support for practices that offer a later return.

Put these terms in a supplier agreement or pilot addendum. It should cover eligible farms and volumes, consent to data collection, access for monitoring, any land or carbon rights that matter, benefit sharing, and what happens if the purchasing relationship ends. Ask local counsel and producer representatives to review the arrangement. The Accountability Framework is a useful reference for supply-chain work involving forests, ecosystems, and human rights.[3]

Avoid assigning an automatic carbon benefit to the buyer. The contract should say which party has the right to report each outcome, how overlapping claims will be checked, and how any issued credits will be handled. A reduction reported in a buyer’s inventory cannot simply be sold for someone else’s offset claim without an accounting review. SBTi FLAG guidance excludes purchased credits used as offsets from near-term FLAG target achievement.[2]

Set commercial measures beside environmental ones: delivered volume, rejection rate, supplier retention, and procurement cost. They tell you whether the program works as a supply-chain investment, even if carbon accounting takes longer to resolve.

Step 4: Build monitoring, reporting, and verification before rollout

Agree on the baseline and data flow before paying for a full rollout. Identify the land units or sourcing regions in scope, the practices that change, the records suppliers already keep, and the additional measurements the program requires. Decide which data can come from field visits, transaction records, or remote sensing, and who checks each source.

For carbon, separate three questions. Did the practice happen? Did emissions or removals change under an applicable method? Can the buyer attribute a defensible share to its purchased goods without double counting? The GHG Protocol’s 2026 guidance includes dedicated chapters on spatial boundaries, data and methods, evaluating actions, credited outcomes, and assurance.[1] These are distinct jobs. A photograph of a planted tree answers only part of the first.

CCC’s MRV and Additionality article explains the separate evidence questions a project reviewer will ask.

Create an evidence file for every reporting period: dated supplier and farm records, purchase volumes, methods and emission factors, uncertainty, quality checks, and changes from the baseline. Specify who can challenge the data and how corrections are recorded. If a project also seeks credit certification, keep project accounting and corporate inventory accounting separate. The GHG Protocol says its land standard focuses on entity-level inventories and does not set the rules for credit certification.[4]

Start with the minimum viable measurement design that can survive review. Add complexity when the pilot tells you which data actually changes a decision.

Step 5: Decide what can be reported and claimed

Insetting program design needs reporting rules before the marketing copy. Procurement, sustainability, finance, and legal should agree on four distinct outputs: operational performance; observed land or nature outcomes; inventory effects, if the accounting criteria are met; and any separately issued credits. One dashboard can display them, but they should not share a single unqualified headline.

SBTi FLAG guidance allows certain land-based removals within a company’s operations or supply chain to contribute to FLAG pathways, subject to criteria including permanence, traceability, data quality, and allocation. It does not allow purchased offsets to meet near-term FLAG targets.[2] Eligibility therefore depends on evidence and the applicable target rules, not on calling an activity “insetting.”

Draft a claims register. For each proposed sentence, record the period, boundary, data owner, calculation method, reviewer, and whether the result is measured, estimated, or still a goal. If the evidence supports only “we funded a pilot with 200 farms,” say that. Do not turn a funding fact into a verified emissions reduction.

What good looks like by year three

Treat year three as a review point, not a promised payback date. A mature pilot should have mapped participating supply volumes, a stable supplier agreement, a repeatable data collection process, and a comparison of commercial and environmental results against the baseline. It should also have a documented answer for outcomes that cannot be included in the buyer’s inventory.

Scale only where the pilot improves a sourcing decision and the evidence can follow the product. If neither condition holds, redesign the intervention or change the corridor. A disciplined program can conclude that a site is unsuitable. That is useful procurement intelligence.

Discuss your insetting program with CCC

Carbon Credit Capital designs nature-based supply chain investments around sourcing needs and measurable sustainability outcomes. Schedule a consultation with our carbon and sustainability experts to map your tier-one supplier network, FLAG exposure, and first pilot decision.

Sources

[1] GHG Protocol, Land Sector and Removals Standard, version 1.1, and companion Guidance, June 2026: https://ghgprotocol.org/land-sector-and-removals-standard ; https://ghgprotocol.org/land-sector-and-removals-guidance

[2] Science Based Targets initiative, Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, especially pp. 16–17, 37, and 41: https://sciencebasedtargets.org/resources/files/SBTiFLAGGuidance.pdf

[3] Accountability Framework initiative, Accountability Framework and guidance for companies: https://accountability-framework.org/

[4] GHG Protocol, Frequently Asked Questions: Land Sector and Removals Standard, questions 10 and 18: https://ghgprotocol.org/blog/frequently-asked-questions-land-sector-and-removals-lsr-standard

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The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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