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The cost to be green? Bullish sentiments on GoOs and VERs markets

Wednesday, 22 September 2021

Yesterday (21 September 2021), Greenfact hosted "The cost to be green? CO2 reduction tools and the latest developments", the third in our intended series of webinars for the year. 

Globally there is mounting pressure for corporations to disclose the societal and environmental impacts of their operations. There are an array of tools that corporations can use in their greenhouse gas reduction and reporting journey however, some of the markets available are usually characterized by fragmentation and opacity.   This webinar aimed to especially bring more insights on the market development of the Guarantees of Origin (GoO) and Voluntary carbon offset markets as carbon reduction tools.

Our first speaker was Selma Utonih, Power GoO analyst at Greenfact who focused on giving a market overview of Biomethane and Guarantees of Origin (GoO) certificates.  Selma shared positive updates in both the biomethane certificates and GoOs with both markets witnessing growth in supply and demand as well as price increases across the board. Total biomethane certificate supply from key countries reached 19 TWh in 2020 while demand reached almost 16 TWh with Germany having the highest consumption in Europe at slightly over 10 TWh. In the GoO market, this year prices for the current year Nordic Hydro GoO which is the market benchmark product increased significantly which had a domino effect on other GoO products like EU Hydro and EU Wind that all increased by over 100%. All three products started the year trading at an average price above 20 Eurocents/MWh and ended August trading above 50 Eurocents/MWh, she also witnessed price increases in the GoO auctions with an increase of 42% witnessed in French auction prices. Some of the possible drivers behind these price increases and concluded with an expectation of continued growth in demand and supply for GoOs in the next 5 years. 

Our second guest speaker was Stephanie Harris, Director of Carbon Markets at 3Degrees who focused on giving a high-level overview of the voluntary carbon offset markets. Stephanie went into detail explaining the extensive process, different market players behind the creation and later trading of carbon offsets as well as the various independent voluntary and regulatory standards and registries that create the eligibility and quality standards for carbon offset projects. The market is mostly made up of projects that reduce and/or avoid GHG emissions versus GHG removal projects however as the market sees more net-zero emissions we could see a shift towards more long-term removal projects to meet changes within the market.  

Our third guest speaker was Stephen Donofrio, Director at Ecosystem Marketplace who focused on giving an overview of the current development and outlook on the carbon offset market. Stephen showed that the voluntary carbon offset market is on track to reach a never before seen market value of over USD 1 billion; the offset market has grown significantly in the past five years from a market value of $320 million and a traded volume of 104.3 MtCO2e in 2019 more than doubling to $748 million and 239.3 MtCO2e in 2021 thus far showing strong demand and growth even through the COVID pandemic. He concluded explaining the positive growth in issuances and retirements in the market showing that from last year the sector with the highest growth in offset demands was the energy sector.

Prior to the webinar, Greenfact sent out a market survey to assess the sentiments of market participants and 60% of respondents were bullish on GoO price developments in 2022 while 77% had bullish sentiments on the VERs/CERs markets. 

Thank you again to all of our speakers, attendees, and survey respondents.

Please contact us here to request access to the presentations and webinar recording. 

Greenfact covers the green certificate markets in Europe, offering pricing data as well as industry/legislative updates. Get in contact with us to find out more!

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