Navigating the Carbon Market: A Guide for Businesses and Investors

Carbon markets are trading systems in which carbon credits are sold and bought. Organisations or individuals purchase carbon credits – that remove or reduce GHG emissions – in the carbon markets to compensate for their own GHG footprint. One tradable carbon credit equals one tonne of carbon dioxide or the equivalent amount of a different GHG, e.g. methane or nitrous oxide. There are two main types of carbon markets: compliance and voluntary carbon markets. 

The Carbon Markets : compliance market & voluntary market

Compliance markets are set up by a national, regional and/or international policy or regulatory requirement. Emissions trading systems (ETS) are a market-based approach to reducing GHG emissions and operate on a “cap-and-trade” principle.  Under this system, the government sets a limit on the total amount of GHG that can be emitted. Emitter companies within scope are required to hold a certain number of allowances. It represent the right to emit one tonne of greenhouse gases. Companies can buy and sell allowances on a market, and they can also generate their own allowances by reducing their emissions.

In the voluntary carbon market (VCM), companies, individuals, and organisations can buy carbon credits freely and without any government mandate. VCMs have been around for over 20 years, yet they have grown rapidly in the last five years as a result of widespread corporate Net Zero commitments. According to McKinsey, global demand for VCM credits is set to increase 15-fold by 2030 and 100-fold by 2050. Project developers are at the core of the voluntary carbon market as they generate credits that reduce greenhouse gas emissions, such as those derived from biochar and carbon removal projects.

Investment opportunities : A boom in the carbon market

Due to high demand for quality carbon removal credits, biochar producers could well benefit from billions from buyers like Frontier Climate, the carbon removal consortium funded by Stripe, Alphabet, Shopify, Meta, McKinsey. Biochar itself is experiencing strong demand on the exchanges, having become a key component of net-zero targets set by Microsoft Corp, JPMorgan Chase & Co, Boston Consulting Group, Amazon and other blue-chip companies. But whilst carbon removal demand is robust, the supply of high quality, trustworthy CO2 removal credits (CDRCs) is still scarce. Having partnered with 50+ project developers CrystalTrade has access to one of the largest pools of high quality of biochar credits.

The Carbon Removal market is booming. Some highlights from the 2023 Year-in-Review report by (CDR.fyi)

  • 4.5 Mt CDR bought : Exponential growth in 2023
  • Multiply by 2 Unique buyers each year.
  • 93% of volume is biochar
  • 27% of Buyers from financial services

 

CrystalTrade’s Role in the Voluntary Carbon Market

Becoming a European Biochar Certificate (EBC) C-sink Broker accreditation by Carbon Standards International marks a critical milestone in our roadmap. This certificate gives us the legitimacy to trace the biochar. From the plant to its final state. And sell the associated certified carbon credits and retire them from the registry.

The EBC is recognised globally as a byword for quality and integrity in the biochar ecosystem. It underscores our commitment to deliver on our mission to bring transparency and quality to the carbon removal markets. 

The EBC enables and guarantees sustainable biochar production, processing and sale. It provides investors with a reliable quality standard. That they can rely on to pre-empt and mitigate any greenwashing, reputational or regulatory threat.

In addition to the EBC certificate, we have been recently awarded the Silver Bio360. Due to our contribution to driving innovation in the carbon removal market. This industry recognition is increasingly positioning CrystalTrade as the go-to-place for high-integrity biochar credits. We are pioneers and thought leaders in the biochar market as we create technology traction with our data-based LCA and traceability tools while driving market demand with credits and verifiable environmental assessment investors can trust.

Book a demo with our Expert

Comments are closed.