How we determine our carbon credits price
The carbon offset cost per tonne of CO2
How much is a carbon credit worth?
One carbon credit is worth one tonne of CO2.
Each carbon credit permanently offsets the equivalent amount of greenhouse gas emissions from the atmosphere by funding emissions reductions projects around the world. These carbon projects include preventing deforestation, renewable energy, supporting research into accelerating carbon abatement technologies, and replanting forests.
What is the average carbon credit price in Australia?
Australian carbon credit units reached $57.50 in January 2022, fell to $31 per credit in March 2022, current market price is sitting around $40 on the spot market as of May 2022.
Some organisations prefer to offset their unavoidable carbon emissions using localised offset projects. There is absolutely nothing wrong with this approach, just be aware that carbon that is released today can be anywhere across the globe in 7 days. If your business has a significant amount of offsetting to do, this could be quite costly.
As an example at current market prices in Australia 1 carbon credit costs $40, if you are required to offset 50t Co2 that equates to $2,000 per year.
In the same example purchasing 1 carbon credit for a project in Brazil may cost $19, so to offset 50t Co2 it would cost $950 per year alternatively a business could commit to spending $2,000 a year and offset 105t Co2 more than twice its carbon footprint which would accelerate emissions reduction.
In Australia, the government body responsible for administering the legislation by the Australian Government for measuring, managing, reducing, or offsetting Australia’s carbon emissions is the Clean Energy Regulator.
At Carbonhalo, we seek the best-priced verified carbon credits around the world and support international projects, to help have a true positive impact on the globe.
How our carbon credits are priced
Why is one carbon credit more expensive than another?
Carbon credits are designed to help reduce emissions – so why are some credits more expensive when each credit represents an offset of one tonne of CO2?
The price of carbon credits can be influenced by multiple factors such as: the country and government body where the credit originates, the type of project the offset is delivered by, carbon trading, and the credit’s verifications.
In many markets, “cheap” is often synonymous with “low quality.” Within the carbon credit market, there is an additional factor called Vintage. Similar to wine, the “vintage” of an offset credit can refer either to the year in which it was issued, or the year in which its associated greenhouse gas reduction occurred. The older the vintage of a carbon credit. the cheaper it can be, this does not mean that the offset is not the same as a younger carbon credit. For example, a reforestation project has been running for 8 years and has carbon credits available to purchase.
1 x Carbon credit certified in 2015 from the reforestation project = $12
1 x Carbon credit certified in 2020 from the same reforestation project = $23
The carbon credit equals the same offset in the same project its just one is older than the other and hasn’t been sold yet.
The inverse argument – that higher prices correlate with higher quality – is not reliably true either. For some offset projects the intrinsic cost for generating greenhouse gas reductions, and the certifications process could be a lot higher than others and will therefore need to charge a higher price for offset credits to be financially viable.
What is the price of your carbon credits?
Carbon pricing around the world is irregular and confusing to follow. Carbon market prices constantly change, market participants come and go, and the public and private sector interact differently in each country offering credits.
At Carbonhalo we’ve adopted a universal approach to our carbon credits price. No matter where you live in the world, our carbon offsets will be offered at the same price. We also offer fractional carbon credits, that allow exact carbon footprint matching which are on the Blockchain to ensure full traceability.