In the first quarter of 2024, the generation of carbon credits increased by 4%, resulting in 91 million tons of CO2 equivalent (tCO2e) in new assets. This growth was driven despite a challenging voluntary market, generating US$1.1 billion in transactions. Even with the increase in supply, carbon credit prices remained low, averaging US$3.40 per tCO2e. This scenario reflects a growing demand for projects of greater integrity, even though the majority of available credits do not meet these more stringent criteria.
A recent study showed an acceleration in carbon credit retirements, an increase of 9% compared to the same period in 2023. This phenomenon is, in part, due to portfolio cleaning and the devaluation of assets due to methodological changes. Project integrity is a growing concern, especially in forest conservation initiatives (REDD+), which have come under criticism and negatively impacted prices, now trading at US$3.08 per tCO2e.
However, high-integrity projects, such as forest restoration, have a demand that exceeds supply. The expectation is that the price of these credits, currently at US$ 11.80 per tCO2e, will rise to up to US$ 40 per tCO2e as new projects mature. Brazil stands out as the leader of the carbon market in South America, with 40% of projects in the region. In the first quarter, the country emitted 16.9 million tCO2e in carbon credits, mostly from REDD+ projects.
Brazil is reinforcing its commitment to sustainability by significantly expanding the generation of carbon credits. This strategic move aims to not only combat climate change, but also promote economic and social benefits across the country. With its vast expanse of tropical forests, it plays a crucial role in carbon capture. The expansion of carbon credit projects is encouraging conservation and reforestation, contributing significantly to the mitigation of climate change and the preservation of biodiversity.
In addition to the environmental benefits, the commercialization of carbon credits is generating new economic opportunities. Landowners, businesses and local communities are seeing an increase in revenues, resulting in job creation and infrastructure development. Carbon credit projects, such as those promoted by ACC, also include social programs that benefit local communities, offering continuing education, health services, combating sexual harassment and access to drinking water and basic sanitation.
The increase in the generation of carbon credits also strengthens Brazil's position in the global sustainability market. With the implementation of advanced technologies for carbon monitoring, quantification and certification, the country is attracting foreign investment and establishing international partnerships. This technological innovation not only improves the efficiency of carbon projects, but also has the potential to be applied in other economic sectors.
Amazon Connection Carbon (ACC) offers specialized services in the management of carbon credit projects, including buying and selling credits, quantifying emissions, and project certification and verification. With a firm commitment to sustainability and valuing local communities, we are ready to help your company engage in environmentally responsible and economically advantageous practices.
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