Cost To Purchase 1 Carbon Removal Credit

How much does it cost to purchase 1 carbon reduction credit? is a common question. Prices can range anywhere from a few cents per metric ton of CO2 emissions to $150/mtCO2e for tech-based carbon capture and storage projects. The S&P Global Platts price assessment of 20 credits includes forward and spot prices. In 2020, the average price will be $1.17/ton.

Currently, the voluntary carbon market consists of eight markets: the American Carbon Registry, the Verified Carbon Standard, the Chicago Climate Exchange, the Climate Action Reserve, and the Regional Greenhouse Gas Initiative. In all cases, carbon offsets have to be verified to meet the market standard and registered to be tracked in the marketplace. Then, buyers and sellers will trade them in exchange for credits. The voluntary market may work under independent international credit accounting standards, but it does not guarantee that each credit represents the removal of a single ton of CO2 by a particular company.

The voluntary market is increasingly becoming popular. The state of California has a climate policy that requires companies to purchase CERs for projects in the state. Those companies can then exchange those credits in the state’s market. This market tends to have higher prices and more demand than the voluntary one. In addition, it requires sellers to commit to buying credits for a long time. Some voluntary markets are also based on independent international credit accounting standards. Unlike voluntary markets, they generate Verified Emission Reductions (VERs) that are aimed at ensuring that each carbon credit is equivalent to one ton of CO2 removed.

How Much Does It Cost To Purchase 1 Carbon Removal Credit?

While the voluntary market has yet to increase much, it is likely to go up in the future as demand for carbon credits increases. In the meantime, most Gold Standard Marketplace projects are priced between $10 and $30 per tonne. Some projects cost up to $47 a tonne. This is considerably higher than the prices observed in 2018 and 2019. Forestry projects have also increased carbon offset prices in 2021, with most increasing two to three percent.

The cost of purchasing one carbon removal credits is dependent on the project. The price varies based on the project type, provider and location. The price per carbon unit for a voluntary market is generally higher than that of a compliance market. As a result, voluntary markets are cheaper overall than the regulatory market. It is important to note that the price for a CER is dependent on the type of offset it is purchased from.

The price for a carbon removal credit depends on its quality and where it is bought. The prices are determined by the type of project. Typically, the cost of a CER varies between $150 and $220. Some of the most common methods of purchasing a CER are over-the-counter and private. You can also buy and sell CERs on a regulatory market or a voluntary market.