Quality and pricing indicators that track carbon market impact

Retirements continued their integrity improvement overall in Q2, but at a snail’s pace. Of the top 10 projects with the largest volume of retirements, only one has ICVCM CCP eligible credits – all others have been rejected by the ICVCM. Seven of the 10 projects have an integrity score of 3 or lower.

Issuance quality is improving at a faster pace. Among the top 10 projects with the largest issuances, four have ICVCM CCP eligibility – projects related to landfill gas and ozone depleting substances. Only three projects had an integrity score of 3 or lower, and three projects had a score of 9 or 10.

• In June, VCM credit prices held relatively steady, with modest decreases observed in Tier 1 (T1) and Tier 2 (T2) credits, which declined by 1.5% and 4.2% respectively. Tier 3 (T3) credits posted a slight uptick of 1.3%.
  
  
• The price premium for T1 credits remained substantial, averaging 65% above T3 prices. T2 credits continued to price nearly midway between T1 and T3, suggesting the market may be beginning to more consistently reflect greenhouse gas (GHG) integrity risk in pricing. The elevated T1 premium was supported by above-market pricing for select fforestation and Reforestation projects, while strength in T2 prices was driven in part by premiums for notable Orphan Well Plugging projects.