Quality and pricing indicators that track carbon market impact

Issuance quality dipped in the month of September, weighed down by a large tranche of low-integrity credits (over 21 million) from a single cookstove project. This one project comprised over 40% of total issuances for the month.

By contrast, retirement quality improved slightly, reaching a new high of 3.5. To calculate the retirement index, we excluded 2.5 million credits in the Verra registry from the Kariba project (VCS 902) that were listed as “Retirement/Cancellation” in September. We assume these were the credits cancelled by South Pole in response to the announcement by Verra of the results of its independent review of the Kariba project. The review suggested that over 15 million excess credits have been issued.

• In September, Tier 1 (T1) credits remained broadly flat, ending the month at USD 8.08, a modest decline of 0.7%. The T1 portfolio is largely composed of ozone-depleting Substances (ODS) destruction, landfill gas, manure management, and leak detection & repair projects. Tier 2 (T2) credits declined slightly by 2.3% to USD 5.96, reflecting selective project-level dynamics.
  
  
• Tier 3 (T3) credits rose 2.1% to USD 5.51, with price gains supported in part by newly added IFM projects. The T1–T3 price premium narrowed to 47%, down from 51% in August, driven by stronger relative growth in T3 compared with T1. Overall, September maintained a relatively stable market following August’s gains, when T2 and T3 credits increased by 3.1% and 7.1% month-over-month, while T1 posted a minor decline of 0.4%.