Asia carbon credit buyers put voluntary markets on hold: Bain

COMPANIES in the Asia-Pacific have doubled down on a “wait and see” approach as global voluntary carbon markets (VCMs) face a crucial test of confidence in 2023, said Dale Hardcastle, Bain & Company’s global head of carbon markets.

In a global brief that called 2023 a “crossroads” year for VCMs, Bain noted that VCMs grew more slowly in 2022 than many expected, despite buoyant market sentiment in the wake of COP26 summit in Glasgow. Compared against 2021, issuances by top standard bodies Verra and Gold Standard fell 27.6 per cent, while retirements fell by 7.5 per cent, according to Climate Focus’ VCM dashboard.

Speaking to The Business Times, Hardcastle said fence-sitting is particularly acute in the Asia-Pacific, because the region’s corporate buyers have less experience navigating offset strategies and VCMs. He noted that only about 6 per cent of carbon credit retirements in 2021 were done by companies in the Asia-Pacific, with many of these being Australian corporates.