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How to build a portfolio of carbon credits in 2023

Whitepaper

In the last year, power in the voluntary carbon market continued to shift to the sell-side. After around 15-20 years of buy-side constraints with limited investment flowing into carbon avoidance and removal outside of the supply chain, some areas of the voluntary carbon market (VCM) are increasingly sold out. At the same time, especially the sought-after removal credits are not appearing in pipelines in the anticipated quantities. This comes with some important implications for organizations that are approaching their net-zero year, i.e. the year in which all residual emissions will need to be removed.

Based on these developments, buyers need to embrace a variety of different purchasing and contracting methods to ensure compliant portfolios. Central to the purchasing side is the goal of balancing price and quality risk while securing the sometimes scarce supply.  Some best practices are consistent across buyer categories and credit preferences

  • Planning for 3-5 years of credit portfolios
  • Mixing and matching technologies, credit types and certification
  • Embracing uncertainty for the better with conscious open positions for high-pipeline, low-priced credits
  • Building in flexibility to profit from future technological innovation and cost improvements

Advanced buyers are increasingly using technology to screen, purchase and manage their portfolios and cope with the complexity that can quickly arise.

Read more about it in our whitepaper.

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