The voluntary carbon market (VCM) saw a sharp rise in activity during November as reported by Xpansiv. CBL’s N-GEO standardized contracts and project-specific nature credit trading nearly doubled trading volumes month-over-month.
Xpansiv runs the largest spot exchange for environmental commodities, such as carbon credits and renewable energy certificates, and excels in registry services for energy and environmental markets.
Trading Doubles as Market Shifts Toward High-Quality Nature Credits
Over 600,000 tons of over-the-counter (OTC) block trades were settled under CBL’s N-GEO and N-GEO Trailing Vintage contracts, with prices ranging from $0.30 to $4.10 per metric ton.
This surge reflects seasonal trends observed last year when November transactions accounted for 8% of the year’s total, doubling October’s volume.
- By mid-December 2024, over 2 million tons had already been traded, representing 16% of the year’s activity.
The market appears poised to match December 2023’s high trading levels, where 31% of the year’s volume was processed.
November also marked the debut of a significant upgrade to CBL’s trading capabilities: the introduction of carbon removal credits as a distinct market segment. This new feature allows market participants to view and trade these credits separately, improving transparency and flexibility.
Complementing this initiative is the enhanced Xpansiv Connect portfolio management system. It supports the full lifecycle of removals, carbon, and renewable energy credit positions. By integrating these capabilities, Xpansiv aims to streamline trading operations and portfolio oversight for participants.
Early adoption of the removals segment has been promising, with 6 firms, including project developers Anew and c2invest, listing RMV-tagged credits on the exchange. Anew notably posted 75,000 U.S. forestry project removal credits, signaling strong support for this market innovation.
Market Activity Breakdown: November 2024
Nature Credits Take the Lead
Nature credits continued to dominate VCM activity in November. Over 60,000 recent vintage Asian reforestation credits were traded, with prices ranging between $25.00 and $42.00.
The volume-weighted average price (VWAP) for AFOLU (Agriculture, Forestry, and Other Land Use) credits surged from $3.76 in October to $9.54 in November. This indicates a growing demand for these high-quality, nature-based solutions.
However, other sectors saw sharp declines in carbon prices:
- Energy credits fell from $1.47 in October to $0.84.
- Industrial waste credits dropped from $2.25 to $0.50.
- Miscellaneous credits declined from $4.01 to $1.06.
These trends suggest a shift in market preference toward nature-based solutions, particularly reforestation projects, which align with sustainability goals and deliver co-benefits such as biodiversity conservation.
Standardized GEO Contracts See Mixed Results
CBL’s Standardized Global Emissions Offset™ (GEO®) contracts experienced significant price fluctuations in November. The VWAP for block trades under the N-GEO contract dropped from $18.10 in October to just $0.77.
This decline partly reflects the types of AFOLU credits traded via the N-GEO contract. In October, the highest-priced N-GEO trade was $26.60, whereas November’s peak was $4.10.
- Interestingly, project-specific AFOLU trading hit a new high, with the most expensive credit selling for $42.00 in November, compared to $27.50 in October.
The disparity underscores the evolving market dynamics, where project-specific trading often commands a premium over standardized contracts due to unique attributes and localized benefits of individual projects.
Bid and Offer Highlights
As of late November, market participants placed several significant bids and offers:
- Renewable energy and AFOLU credits below $1.00 accounted for nearly 400,000 tons of activity.
- Additional bids for 175,000 tons of renewable energy and older AFOLU credits from Mai Ndombe, Southern Cardamom, and Kasigua were priced between $0.25 and $0.30.
These low-price bids reflect continued interest in older and less premium credits, though the market’s overall focus seems to be shifting toward higher-quality, higher-priced credits, particularly in the nature-based and removal segments.
Is This a New Era for the Voluntary Carbon Market?
The November surge in Xpansiv’s voluntary carbon market activity signals a robust close to 2024. CBL’s efforts to innovate with removal credits trading and enhanced portfolio tools have positioned it to meet the growing demand for transparency and efficiency in environmental markets.
The sharp rise in AFOLU credit prices and the growing popularity of removals reflect the market’s potential to scale impactful projects. With over two million tons traded by mid-December, the VCM is not only demonstrating resilience but also showing signs of maturation, as participants increasingly prioritize quality over quantity.
As market preferences evolve, nature-based credits and removal projects are gaining prominence, attracting higher prices and increased trading volumes. This trend aligns with global efforts to prioritize high-quality solutions that not only offset emissions but also contribute to broader environmental and social benefits.
Is this market activity signal a new era for carbon markets in 2025? Let’s keep watch.
