8.2Gt CO2e traded in 2009 – up 68% on previous year
Oslo (06 January 2010)
The global carbon market in 2009 saw 82 billion metric tonnes (gigatonnes or Gt) of carbon dioxide equivalent (CO2e) exchange hands, up 68% on 2008, according to a recent report published in Carbon Market Research – and released by Point Carbon, the leading provider of market intelligence, news, analysis, forecasting and advisory services for the energy and environmental markets. In 2008, trade was also up an impressive 83% on 2007, reflecting the rapid expansion in global carbon trading over the past three years and showing how carbon has dramatically bucked the current global downturn which has depressed most global commodities.
Despite this impressive growth in trade, however, the value of the global carbon market remained virtually unchanged against 2008 figures, having doubled between 2007 and 2008. The carbon market was worth €94bn (US$136bn) in 2009, €92bn (US$133bn) in 2008 and €40bn (US$58bn) in 2007.
“The expansion in carbon trading in 2009 was mainly due to a strong increase in the volume of European Union Allowances (EUAs) traded”, said Endre Tvinnereim, Senior Analyst at Point Carbon, adding “however, due to lower carbon prices the market barely grew in value over the past 12 months when compared to 2008”.
Point Carbon’s weighted-average world carbon price last year stood at €11.40, down from €18.87 in 2008. The weighted-average EUA price was €12.89/t down 41% on 2008 whilst secondary Certified Emissions Reductions (CERs) were seen at a weighted average of €11.80/t or 91.5% of the EUA price. The price of CERs was down 21% on 2008.
Taking each market segment separately, the EU’s Emissions Trading Scheme (EU ETS), continued to see the lion share of carbon traded in 2009, with 5.6Gt traded, equivalent to 68% of global volume, with a value of €73bn, or 77% of global value. The second-largest segment was the Clean Development Mechanism (CDM) market, which includes the primary and secondary market for CERs, as well as options. In 2009, the CDM market saw 1.6Gt of carbon traded, worth some €17.5bn. The Regional Greenhouse Gas Initiative (RGGI), the first mandatory, market-based effort in the US, was the third largest segment in 2009, and showed the greatest growth over 2008, rising from a market where 71Mt CO2c was traded, worth €178m, to a market where 765Mt CO2e was traded, worth €1.7bn, last year.
“The almost ten-times increase in value and volume traded in the US last year shows that cap-and-trade has finally landed in America, with the launch of the Regional Greenhouse Gas Initiative on 1 January 2009”, said Endre Tvinnereim.
Since Point Carbon’s records began in 2003, the world’s carbon markets have exchanged 18.3Gt CO2e to a total value of €259bn. Thus, the 2009 numbers constitute almost half the total volume and just over one-third of total value transacted over the past seven years.
Note to editors
• The Kyoto Protocol to the UN Framework Convention on Climate Change, which entered into force in February 2005, resulted in the launch of the EU’s Emissions Trading Scheme (ETS). The EU ETS is the world’s first international emissions trading scheme. It works on a cap - and - trade basis, where the total allocation is set at the start of a trading period. EU Allowances (EUAs) are the tradable unit under the EU ETS. Up to a certain limit, it is also allowed to import carbon permits from third countries (CERs and ERUs).
• The global carbon market includes all the world’s compliance markets, including the EU ETS, CDM, JI, AAU, RGGI, Australia’s CPRS and NSW, pre-compliance purchases in North America, Canada’s Alberta and British Columbia schemes and New Zealand’s ETS. It does not include voluntary-market transactions.
• Certified Emissions Reductions (CERs) are project credits generated from emission reduction countries in developing countries.
• Emission Reduction Units (ERUs) are project credits generated from emission reduction
countries in industrialised countries.
• Primary CERs have a delivery risk while secondary CERs are already generated and issued by the CDM Executive Board and are hence risk free
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