Voluntary Carbon Market: 2024 H1 Review

Parting with 2023 came as a relief to many Voluntary Carbon Market (VCM) participants. The market faced increasing criticism for failing to uphold climate integrity and transparency, resulting in decreased trading volumes and lower valuations. Our 2023 VCM Review predicted 2024 to set the stage for market consolidation – marking a halt in the declines in issuances and retirements, but without a material bounce back in demand and pricing. How did our 2024 VCM forecast play out?   

Here are some of the headlines from this year’s first VCM Review covering the first half of 2024:

• Following a retreat in year-to-year issuance volumes in 2023, issuance volumes stabilized in the first half of 2024. Notably, issuances from new vintages increased compared to the same period in 2023. Aggregate issuances breached the 2 Gt mark. 

• Prices continued to decline. Valuations of exchange-traded and over-the-counter transacted carbon credits declined across the board, although buyers are offering premium pricing for high-quality projects. 

• Retirements of carbon credits hold steady for a third year in a row. This confirms robust demand for carbon credits, despite the current cautious investment sentiment affecting the market. 

• Carbon credits from cookstove activities reached record retirement levels, with retirements increasing by over 80 percent compared to the volumes observed in H1 2023. 

• Issuances from NBS carbon removal projects topped volumes from NBS avoided emissions activities for the first time due to a growing pipeline of carbon removal projects and a pull-back in interest in certain REDD+ projects. 

The data presented in the annual VCM Review reports is powered by the Climate Focus VCM Dashboard.   

If you would like to receive monthly updates of the carbon market dashboard please email us at dashboard@climatefocus.com.