Higher-than-expected issuances of DEBs offsets in the coming years will prevent a short position of in-state CCOs from arising until the end of the next decade, Toronto-based analysts ClearBlue Markets said in a report published Tuesday.
ClearBlue said the cumulative balance of DEBs credits will peak at 21.9 mln in 2023 due to a large qualifying forestry project issuance of 11.7 expected in 2022.
The report added an average of 5.5 mln DEBs offsets are slated for issuance each year over the 2021-30 timeframe versus 6.5 mln in annual demand, compared to 3.3 mln of annual supply and demand of 6.2 mln in the analysts’ previous projections.
“The larger supply results in a looser market for DEBs offsets where we now do not expect a cumulative negative balance through 2030, compared to a cumulative negative balance from 2025 onwards in our last report,” ClearBlue wrote.